Front Page Titles (by Subject) PART I: ANTECEDENTS OF THE CONTINENTAL SYSTEM - The Continental System: An Economic Interpretation
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PART I: ANTECEDENTS OF THE CONTINENTAL SYSTEM - Eli F. Heckscher, The Continental System: An Economic Interpretation 
The Continental System: An Economic Interpretation, ed. Harald Westergaard (Oxford: Clarendon Press, 1922).
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ANTECEDENTS OF THE CONTINENTAL SYSTEM
THE Continental System is a unique measure to which a country resorts for the purpose of crushing a political enemy by economic means and at the same time building up its own commercial and industrial prosperity to an extent previously undreamt of. The will to injure one's enemy and to benefit one's own country is, therefore, a matter to be taken for granted beforehand, and consequently does not require much elucidation. That will is seldom lacking in the life of nations, least of all when they are at war, and was evidently bound to attain an unusual intensity in a statesman of the character of Napoleon, who throughout his career renounced all moral traditions and made self-assertion his loftiest lodestar. What we have here to investigate and elucidate, therefore, is not mainly these simple aims of policy, but rather, if one may put it so, the means to those ends; or, to express it more clearly, what friends and foes conceive to be gain and loss in the sphere of economics, that is, what kind of economic changes they regard as beneficial and as detrimental. These matters are very far from self-evident even at the present time, although they have been the subject of protracted scientific treatment; and they were obviously still less self-evident a hundred years ago. If we wish to understand the nature of the Continental System, therefore, we must first consider the body of ideas whence it proceeded; and if we wish to understand its effects, we must further consider those ideas with reference to their true economic connexions. Only in that way, too, can we form a clear idea of the similarities and dissimilarities of the Continental System with respect to the blockade policy pursued during the recent World War; for the aim to injure the enemy and benefit the home country is to be taken for granted as much in our own time as it was in the time of Napoleon.
In order to form a correct understanding of the antecedent conditions of the Continental System, in the meaning just given, we must point especially to one feature of the mercantilist point of view whence it sprang, namely, to what we may call its static conception of economic life. If, for instance, we refer to one of the most clear-headed and consistent of the mercantilist statesmen, namely, Colbert, we learn from many of his writings that he conceived the industry, trade, shipping, and bullion resources of the world as quantities given once for all, which, therefore, could not be appreciably increased or decreased by human activity. Under such a conception it is obvious that there can be but one conclusion, viz., that the economic prosperity of a country depends on its power to deprive its competitors of their shares of the given quantity, and not on its power to increase the total quantity. That is to say, only at the expense of others can a country be rich.1
It is not difficult to understand to what kind of economic policy such a conception would naturally lead. It led to the policy of commercial war; and without any great exaggeration we may say with the well-known German economic historian, Professor Schmoller, that the trade policy of former times consisted of an unbroken series of commercial blockades.2 This, then, was the body of ideas in which the Continental System originated, in so far as commercial wars, in the current view of that time, were bound to seem economically profitable to an extent that can scarcely be appreciated by any tolerably clear-minded person of to-day.
All this, however, does not explain of what the benefit and profit of commercial war, on the one hand, and the injury and loss on the other, were supposed to consist. But on this point, too, the mercantilist conception gave all the guidance necessary. Profit was supposed to consist in the augmentation of exports, in forcing the goods of one's own country on other countries; loss, in allowing other countries to force goods on one's own country. Industry, trade, navigation, that is, economic activity in general, were in a way regarded as ends in themselves. The goods that were their fruits, so to speak, were to be exported so far as possible, if they belonged to one's own country, and to be kept out so far as possible, if they belonged to other countries. The verdict of the balance of trade—including, however, the balance of payments for freightage, &c.—determined the result. Modern economists are far more familiar with this trend of thought than they are with the static conception of things. Even in our own day 'the natural man' reasons in this way; and this reasoning, so far as one can see, is substantially a fruit of the ideas contributed to history during the mercantilist period.3
All this makes clear, not only the existence, but also the tendency, of commercial wars. Their object was necessarily to force the greatest possible amount of one's own goods into the enemy's country, and, so far as possible, to prevent the enemy from introducing goods into one's own country. Inasmuch as this, precisely because of the conception indicated, was the object of trade policy even in time of peace, the transition from peace to war was very easily effected; and for that reason we undoubtedly meet with a consistency in the trade policy of that time which, strictly speaking, is lacking in our own time. Nowadays, as in the days of mercantilism, most states, guided by the economic perceptions of the average man, labour in time of peace to render difficult the importation of foreign goods, and at the same time to force their own products on the world market, (although in reality this is incompatible with the former aim). In time of war, however, they suddenly swerve around, either to the inverted standpoint of encouraging imports and hampering exports, or, in general terms, of preventing all trade with the enemy. This statement does not, of course, imply any judgment as to which policy has the greater justification; it is merely an assertion of the at least seemingly greater inconsistency of our present procedure.
An important part of what follows will be devoted to the investigation of the question as to whether and to what extent the older procedure may be expected to accomplish its purpose—the crushing of the enemy by economic means. And in that connexion it will be shown that, while the older tendency in war time was in close harmony with commercial policy in peace time, its relation to the generally observed rules and methods of naval warfare was far more inconsistent.
To begin with, however, it seems expedient to trace in some detail the evolution of commercial policy during the century before the Continental System, with special reference to the development of that sphere of activity to which the great trade blockade was especially to be applied, namely, the commercial relations between Great Britain and France.
BEGINNING OF ANGLO-FRENCH COMMERCIAL WAR (1660-1786)
England and France, as is well known, had been adversaries, with certain more or less lengthy intervals, from the early Middle Ages; and after mercantilism had become firmly established in both countries, it was inevitable that the commercial policy of both should come to be marked by the efforts and tendencies to which we have just referred. To go back no further than the middle of the seventeenth century, we find evidences of antagonism in the customs regulations at least from 1660 on; and after 1678, when the two countries were on the verge of actual war, we may regard commercial war and mutual embargo simply as the normal state of relations between them. After the deposition of the House of Stuart and the outbreak of war between England and France in 1689, there was a further intensification of the antagonism; and with the outbreak of the War of the Spanish Succession, in 1701, the commercial war may be said to have assumed its definitive form. In connexion with the Peace of Utrecht, in 1713, a famous attempt was made to settle the commercial conflict, as well as the political differences, by means of a commercial treaty; and good-will was not wholly lacking either on the French side or on the side of the Tory government then established in Great Britain. But in other British circles, especially among merchants and manufacturers, the opposition was too strong, and the treaty was consequently deprived of the two clauses which gave it its importance, that is, the clause concerning mutual treatment as the most favoured nation and the clause concerning the mutual abolition of all prohibitions and customs restrictions introduced since 1664, or, in certain cases, since 1699. The result was that the embargo was maintained on both sides, without any noteworthy interruptions, throughout the greater part of the eighteenth century, or for a period of more than a hundred years.
An elucidation of the nature of this hundred years' commercial war between France and Great Britain is essential to a correct understanding of the origin and development of the Continental System. In England, for instance, all importation of French wine, vinegar, brandy, linen, cloth, silk, salt, and paper, and also of all manufactures containing French silk, thread, wool, hair, gold, silver, or leather, was prohibited in 1678.4 The law itself condemned importation from France, in principle, as 'a common nuisance', and provided that the French goods were to be destroyed and not allowed to enter, even if they had been captured by English war-ships or privateers. After 1685, however, when this direct persecution of French goods was abandoned and replaced by the establishment of a large number of additional customs duties,5 a number of severe measures followed on the part of France. Accordingly, when war actually broke out, in 1689, England returned to the principles of 1678. In due form she introduced a general prohibition on the importation of French goods and ordered that all liquid goods that were captured should be poured into the rivers or the sea, or be 'staved, spilt, and destroyed' at the place where they were stored; also that all cloths, paper, salt, &c., should be publicly burned.6
It is unnecessary to dwell upon the protectionist nature of these measures, the main object of which was to prevent French products from competing with domestic products in the English market. Later on, France, which as a rule seems to have been somewhat slower to act, proceeded to adopt similar measures, especially after the outbreak of the new war in 1701. Thus when Adam Smith, who among other things was a Scottish commissioner of customs, entered into a detailed discussion of Anglo-French trade policy in the third edition of his famous work more than eighty years afterwards, he felt justified in stating that, quite apart from the multitude of import prohibitions, especially on all kinds of textiles, the majority of the French imports before the outbreak of the new war in 1778, were assessed by the British customs to the extent of at least 75 per cent. of the value of the goods involved, and that, as a rule, this was equivalent to a formal prohibition.7
Such, then, was the nature of commercial policy in the eighteenth century, in so far as it is revealed in the customs regulations of that time. But no idea of the economic conditions of former days could be more erroneous than that which is conveyed by the content of such prohibitions and restrictions. The regulations, as a matter of fact, constitute merely an expression of what the holders of power wished to see realized, and accordingly may be said to illustrate, primarily, nothing more than the economic views of the time. As regards the actual situation, we may safely assume that it was quite different from what the authorities had in view, since otherwise the regulations would not have been necessary; and if we find them repeated at short intervals, as is usually the case, we may further assume that this was due to the fact that they were not complied with. In point of fact, the only exceptions to this principle are certain codifications of an already established system of law. These often express a phase that has already passed, it is true, but they nevertheless always have something to correspond to them in the world of realities, which is by no means the case with the innumerable ordinances of the regulative or creative type.
In the sphere of trade policy it is well known that smuggling played a very important rôle. We do not know, for obvious reasons, the exact extent to which it was carried on, but there can be no doubt that it was of frequent and widespread occurrence. According to contemporary opinion, indeed, it was almost as extensive as legitimate trade; and Adam Smith calculated that the commercial intercourse between Great Britain and France, which was exceptionally hampered by the customs regulations, was even principally carried on by smugglers. Thus it hardly entered people's minds that the prohibited foreign goods should be really unobtainable in the countries concerned. After the Peace of Versailles in 1783, for instance, everything English came into fashion in France, and prohibited goods were imported in great quantities, in spite of the fact that the French customs officials, according to the French economic historian, Emile Levasseur, carried their strictness so far as to seize the wearing apparel of travellers and hold it pending their departure from the country.
But it was not due entirely to the demands of economic life that recourse was had to this very radical and illegal practice, which in many cases was not only tolerated, but actually facilitated by the authorities themselves. This was usually accomplished by means of a system of licences, which assumed larger or smaller dimensions, according to circumstances, but which were almost always of importance. This licence system, therefore, must almost always be taken into account as an ever-present means of circumventing the nominally valid ordinances. The licences undoubtedly often originated in favouritism, bribery, and similar forms of corruption; but not infrequently their origin lay deeper. Partly they were intended to satisfy the insatiable demands of trade, which made themselves felt either within or in opposition to the law, and which, accordingly, it was often considered best to satisfy silently beforehand; but partly also, and at least as often, they arose from the constant need of money on the part of the government. This latter consideration gave rise to what one might call fiscalism, that is, to the tendency to change a policy with a certain economic aim—whether rightly or wrongly conceived—under the pretext of bringing revenue into the coffers of the state. On this rock a great deal of the economic policy of the mercantilist period, to say nothing of that of earlier mediaeval times, had suffered shipwreck; and this, too, was to be of fundamental importance in relation to the Continental System. As a characteristic example of the combined effect of smuggling and the licence system, it may be mentioned that in the last decade of the seventeenth century there were discovered in England traces of a great conspiracy organized to facilitate the importation of prohibited French silks under false or stolen labels of the kind prescribed to indicate the fact that the goods involved had either been imported under licence or else had been manufactured within the country.8
The actual intercourse between two countries thus followed a course which diverged considerably from that laid out by their professed policies. But if this was always the case at times of more or less state interference in the economic domain, it was especially the case in the eighteenth century. During that period, in fact, the old policy was exposed to undermining currents flowing from two different quarters, namely, from the general transformation in all conditions of production which had received the nowise exaggerated name of Industrial Revolution, on the one side, and from the new social philosophy which was slowly paving the way for economic liberalism, on the other. Both of these factors were destined gradually to put an end to the old economic order; but in the long run it was the change in the conditions of production that may be said to have exerted the greater influence. In spite of that, however, a direct influence on commercial policy came from the new social philosophy. Curiously enough, this impulse originated in France, where the new ideas were very far from being common property, as the following development should show very clearly. But just as Turgot, in his capacity of minister of finance under the autocratic King Louis XVI, succeeded in 1776 in carrying through a quite revolutionary reform of internal industrial legislation—a reform which by no means had any favourable public opinion behind it—so one of his pupils, as foreign minister, succeeded ten years later in bringing about a change in external trade policy, just because there was no representative assembly to oppose his measures.
ANGLO-FRENCH COMMERCIAL TREATY OF 1786 (EDEN TREATY)
The author of this departure from the century-old commercial policy was the Comte de Vergennes. He was quelque peu disciple des philosophes, and it was especially because of the physiocratic views he shared with certain politically influential circles in France that he was able to accomplish his purpose. For as physiocracy attached foremost importance to agriculture, it was only natural that French statesmen were able to create substantial facilities for the importation of the industrial products which England was eager to sell, in return for facilities for the exportation of the agricultural products which she was no less eager to buy. Vergennes, undoubtedly of set purpose, neglected to find out the opinion of French industrial circles; and there is no doubt that this was later on one of the starting-points of the disapproval of his work. In England the efforts to establish better trade connexions between the two countries met with great sympathy, and that, too, precisely among those elements of the population which had brought to naught the commercial treaty of 1713. As was shown by a far-reaching inquiry conducted in Great Britain, the representatives of almost all industries were eager for increased sales in the French market, especially because of their desire to make up for the loss which they believed themselves—incorrectly, as a matter of fact—to have sustained through the cutting off of the American market by the secession of the colonies; and with very few exceptions they scoffed at the idea of danger arising from French competition in the home market. The British statesmen were naturally much impressed by this attitude, but at the same time they were by no means uninfluenced by the views of the economic theorists.
It was in England that the new ideas, which had gradually gained more and more predominance in both countries in the course of the eighteenth century, received their for all time classical synthesis in Adam Smith's The Wealth of Nations (1776), which riddled with criticism the unreasonableness and inconsistency of the old system that existed on paper, especially in the form it assumed in the commercial relations between Great Britain and France. Adam Smith's thesis was that 'a nation that would enrich itself by foreign trade is certainly most likely to do so when its neighbours are all rich, industrious, and commercial nations', inasmuch as the international exchange of goods was thereby rendered all the more profitable. The applicability of this to France is apparent, and of special interest is the comparison drawn between the trade with the large and near-by French market, on the one hand, which permitted a turnover of business capital several times a year, and the boasted and until then in every way favoured trade with the thinly populated and remote North American colonies, on the other, where the return from invested capital was not made until after the lapse of several years. Through the American War of Independence this comparison received an appositeness which Adam Smith himself certainly did not foresee.9
There can be no doubt that Adam Smith's book exerted great influence on William Pitt, who was the leading statesman of Great Britain from 1783. According to a famous anecdote, Smith once arrived at a dinner somewhat later than the other guests, who rose to receive him. He begged them to remain seated, whereupon Pitt remarked that it was only right for them to rise, since they were all his pupils. While this anecdote is perhaps just as little deserving of unqualified belief as are other similar anecdotes, yet one may place implicit confidence in a statement which Pitt is authentically credited with having made in Parliament after the death of Adam Smith, namely, that he (Smith) had offered the world the best solution of all economic and commercial questions.10
The result of these new forces was the Anglo-French commercial treaty of 1786 (often called the Eden Treaty, after the name of its English negotiator), which put an end to the hundred years' commercial war between the two western powers. During the negotiations Pitt had stood firmly on his ground, with the result that in the final settlement the British forced compliance with practically all their demands, while the French allowed nearly all theirs to drop. Customs duties were lowered all along the line, usually down to 10 or 15 per cent. of the value of the goods, and prohibitions on imports were abolished. On the other hand, almost the only British industry which was still uneasy about French competition, namely, the silk industry, had its demands respected to the extent of nothing less than a total prohibition on the importation of French silks into England.
But it was soon to prove that this somewhat belated breach with the century-old restrictive policy had no support in French public opinion, least of all in industrial circles. Indeed, one may go so far as to say that it was precisely this departure from the tradition of commercial war that led to a renewal of the old policy after the French Revolution. The Eden Treaty, which was signed less than three years before the convening of the French States General on May 5, 1789, in fact occupied almost from the very beginning a foremost place in the long list of sins imputable to the ancien régime. The French textile industries, especially the cotton industry, had as early as the 'eighties managed to benefit by the great technical revolution in England, mainly by attracting British foremen and machinery to French mills; but, naturally enough, they were not yet anything like equal to their teacher. Besides this, it was alleged by the French that the value of British wares declared at the customs was so much understated that the duty fell from the nominal 10 or 15 per cent. to an actual 2 or 3 per cent.; and at the same time British manufacturers were said to increase the prices of raw materials in France through the making of extensive purchases there. The French calico, woollen, pottery, steel, and leather industries complained bitterly of British competition and of the general unemployment for which it was held responsible. Even the Lyons silk industry worked under great difficulties, which could not be attributed to any British competition, to be sure, but which at all events were in no manner lessened by the treaty with its retention of the British prohibitions. Bitterest of all were the complaints that emanated from the textile towns in the north of France—Amiens, Abbeville, Sedan, Rouen, Rheims, Châlons-sur-Marne. Their protests were also embodied in the famous cahiers, in which the French people in 1789 gave expression to their feelings in all branches of activity. Moreover, it has been observed that Robespierre, one of the sworn enemies of Great Britain during the Revolution, was a representative of the province of Artois and in such capacity voiced the dislike that was there fostered against British competition. But the feeling against the Eden Treaty was by no means confined to these regions. It is really only with regard to the wine district that we meet with any attitude of satisfaction toward the new policy; and it is highly significant that the cahiers of the city of Paris, for instance, contained a demand that the treaty should be submitted to the States General because of the revolutionary changes it had involved and the vigorous protests it had evoked from all parts of the country. Public opinion, indeed, was unanimous in attributing the severe industrial crisis of 1788 to the Eden Treaty, which was called the death-warrant of French industry. An inspector of manufactures even went so far as to compare its detrimental effects with those that had followed the revocation of the Edict of Nantes in 1685, which had played havoc with a great deal of the work done by Colbert and his predecessors.
Thus there could be scarcely any doubt as to the political effects of this first departure from the policy of commercial war; and it is this aspect of the matter which is of prime importance in this connexion. It is quite another question whether the Eden Treaty, even for the moment, was actually responsible for the placing of French economic life upon the low level where it was destined to remain, with a short interruption, during the revolutionary and Napoleonic periods. Severe as was the crisis to which it gave rise, there can be little doubt that precisely the last years of the ancien régime were characterized by exceptional prosperity especially, but by no means exclusively, for French trade, and that during the following ten or fifteen years Frenchmen looked back to this period as the zenith of their country's economic development. Even as regards industry, it is a fact that not even the flourishing period of the Consulate (1799-1804) elevated it to anything like the same height that it had attained under the ancien régime.11 Moreover, the difficulties created by free intercourse consequently appear to have been exaggerated. There are positive evidences of certain wholesome effects on French industry which must be connected with the increased intercourse with Great Britain. Thus, in 1787, the year of the ratification of the treaty, there was set up in France (Orléans)—naturally by an Englishman—the first steam-driven cotton spinning mill.12 Moreover, in the Constituent Assembly we find a muslin manufacturer from Versailles (1790), as well as a silk manufacturer from Lyons (1791), stating that the development of French industry, after the difficulties of the first years, had increased apace under the stimulus of British competition, and that in many cases French manufacturers had succeeded in imitating and, by means of cheaper labour, in actually underselling their British competitors. This may or may not be a more faithful picture of the actual situation than that created by the innumerable complaints; but at all events it seems only natural that a more lively intercourse with Great Britain should have facilitated the spread of new ideas and inventions. But to this, as to other things, there applies a truth which is far too often overlooked, namely, that the economic policy of a country is not determined by actual economic conditions but by the popular ideas concerning those conditions—which is manifestly quite another matter.
The commercial policy of the Revolution, therefore, very soon returned to the traditions established before 1786. Of recent investigators we may refer especially to M. Albert Sorel, who in his monumental work, L'Europe et la révolution française (1885-1904), seeks with exhaustive, though somewhat exhausting, persistence to maintain and emphasize the consistency of French policy before and after the Revolution. In nearly all the departments of foreign policy he represents the French revolutionaries of different shades as unconscious successors of Richelieu, Mazarin, and Louis XIV, and as equally unconscious predecessors of Napoleon, whose ideas and measures are therefore also represented as almost entirely in line with the traditional policy of France. Sorel has undoubtedly exaggerated the predestination of this development, as Professor Hjärne has pointed out in his noteworthy book, Revolutionen och Napoleon (Stockholm, 1911); and in general it is undoubtedly true that the deepest conception does not consist in representing the same dramatis personae as constantly reappearing in different costumes. But in the economic sphere—which does not stand out very much in Sorel's work, with its marked bias in favour of foreign policy—the connexion with the past is very strongly emphasized. As is well known, the men of the Revolution derived their strongest impressions from Rousseau, and, so far as one can see, they were very little impressed either by physiocracy or by British liberalism. Consequently they stood, unconsciously, but almost entirely, under the all-pervading influence of the old economic conception. Thus it was almost in the nature of things that the Eden Treaty not only should be treated as an isolated episode, but should positively hasten a return to the old system—especially inasmuch as the commercial reconciliation with Great Britain was the work of none other than the discredited and despised ancien régime.
Naturally enough, however, it was the general political situation which was chiefly responsible for the return to the policy of commercial war; and consequently some few years elapsed before the change was made. In 1791 the Constituent Assembly adopted a new tariff, which, after great protectionist preparations, ultimately came to offer only a very moderate amount of actual protection. France and Great Britain were then at peace, and both were respecting the Eden Treaty. But the new tendency was even then asserting itself in France, not only in the form of recurring complaints against British competition, but also in the form of an actual raising of the customs rates on woollens and other textile goods manufactured in the Duchy of Berg—the even then flourishing textile region on the eastern side of the Rhine, which was destined to play an important part in the history of the Continental System. In justification of these measures, whereby the importation of textiles into France from the east was cut off, there was asserted the need of 'alleviating the detrimental effects' of the Anglo-French treaty of 1786.13
Great Britain, under Pitt's leadership, had as long as possible stood aloof from the struggle against the French Revolution. But toward the end of 1792 the relations between the two countries became very strained. Great Britain held up cargoes bound for French ports, whereupon France retaliated by denouncing the Eden Treaty. This was shortly after the beginning of 1793; and on February 1 of that year, less than two weeks after the execution of Louis XVI, war actually broke out. This precipitated both countries into a policy of economic strangulation which was destined to last for more than twenty years and soon to leave all its predecessors far behind. Under the Revolution, and to a certain extent under Napoleon as well, this policy had two very closely interwoven sides, which, however, must be kept separate for the present. One side consists of the blockade measures and the generally rude treatment of maritime intercourse, in which Great Britain decidedly led the way, but was very closely followed by France; and the other side consists of the compulsory measures that were adopted specifically in the sphere of commercial policy. The latter measures were of real importance only on the French side, as a matter of fact, since similar measures on the British side would have been meaningless for the reason that French goods could hardly have reached England without English co-operation. It is the latter policy which we will first consider.
RENEWAL OF ANGLO-FRENCH COMMERCIAL WAR (1793-1799)
On March 1, 1793, only a month after the outbreak of war, the measures of prohibition began, and within a few months the Convention had passed almost all the laws that were possible along that line. The first law of this kind passed by the Convention, which also annulled all treaties previously entered into with enemy countries, prohibited indiscriminately the importation of a large number of textile, metal, and earthenware goods which were regarded as normally coming from England—it was, of course, the home manufacturers of these articles who had especially complained of British competition—but did not restrict the prohibition to goods coming from any specified country. With respect to all goods not expressly exempted, however, it was stipulated that evidence should be furnished that they did not come from an enemy country. This rendered necessary the use of certificates of origin for certain goods, even though they were indispensable to French consumers and could not be obtained from neutral countries (especially sugar). Two or three months later (May 19), accordingly, such goods had to be exempted. But the whole of this first law was a mild warning in comparison with the outbreak of fury, harmonizing completely with the spirit of the Reign of Terror, which on October 9 of the same year (Vendémiaire 18, year II) appeared in the form of a law bearing the title: Loi qui proscrit du sol de la république toutes les marchandises fabriquées ou manufacturées dans les pays soumis au gouvernement britannique. Its express application to Great Britain, one of the enemies of France, is in itself significant, the whole law, as its title indicates, being a straightforward proposal to persecute all British goods in the most drastic manner. It imposed on every holder of British goods the obligation to declare them and hand them over to the authorities, and provided that any customs official who allowed such goods to enter the country would be liable to twenty years' imprisonment in irons; and the same punishment was assigned to any person who imported, sold, or bought them. But even this was not enough. The law further provided that anybody who wore or used British goods was to be regarded as suspect and to be punished as such in accordance with the notorious loi des suspects; that is to say, he might be arrested and imprisoned at any time. All posters or notices couched in English and referring to stocks of British goods or containing British trade marks or appellations, as also all newspapers announcing the sale of British goods, were 'proscribed'; and the punishment in this case also was twenty years' imprisonment in irons.
After the crisis of Thermidor and the fall of Robespierre early in 1795, the legislators again retraced their steps to some extent by slightly lowering the duties on non-British goods. This did not last long, however, since they were raised again by the Directory at the close of the following year. On the whole it may be said that the rule of the Directory, from the autumn of 1795 to the autumn of 1799, marked a return to the policy of the Reign of Terror, though in a somewhat modified form, throughout the entire economic domain. As a sign of welcome to Lord Malmesbury, who visited Paris to negotiate peace, there was accordingly passed on October 31, 1796 (Brumaire 10, year V), a law prohibiting the importation and sale of British goods on an even larger scale than that established by the laws of 1793, inasmuch as the prohibition was extended to cover goods that were derived, not only from British industry, but also from British trade. And at the same time there was adopted—so far as is known for the first time, but certainly not for the last time—the somewhat clumsy expedient of declaring certain groups of goods to be British, quite irrespective of their real origin. Even such goods as were brought into the country from captured or stranded vessels were not allowed to remain there, but had to be promptly re-exported. The resemblance between this and the above-mentioned regulations of the seventeenth century is unusually striking. Moreover, nearly all the regulations of the year 1793 were renewed in substance, although the provision concerning certificates of origin had again to be limited after a few months. Only in regard to penalties was there a very considerable modification. Among the goods which were always to be regarded as British was refined sugar; but now again, as in 1793, its exclusion proved to be impossible, and the smuggling to which it gave rise finally resulted, in 1799, in the prohibition being replaced by a high customs duty. Evidence of the extent to which French legislators thought it possible to carry the persecution of everything British is furnished by the fact that the importation of Geneva watches was prohibited on the ground that they contained a small amount of steel presumed to be of British origin.
Another link in the policy of commercial war was formed by the Navigation Act, which was brought forward with great oratorical fanfare and was passed by the Convention on September 21, 1793, the anniversary of the overthrow of the monarchy. In exact imitation of the famous corner-stone of English maritime policy, the Navigation Act of the Commonwealth of 1651, and also of earlier French ordinances, it forbade foreign vessels to import any products other than those of their own country or to carry on coasting trade in France. Moreover, by a supplementary law of October 18 (Vendémiaire 27, year II), all foreign vessels were saddled with dues about ten times as high as those imposed on French vessels. There is a close analogy between these measures and those that were adopted during the seventeenth and early part of the eighteenth centuries. The latter were directed chiefly against the principal carrying country of the time, the Netherlands; and in the same manner the law of the Convention was directed against the new commercial nation, Great Britain. Perfide Albion came to occupy the same position in the popular imagination as its predecessor, only it was regarded as still more dangerous owing to the great development of its industries and political power.
All these trade laws of the Revolution manifestly had the same double character as their forerunners of the seventeenth and eighteenth centuries; that is to say, they were intended to injure Great Britain by excluding her goods and vessels, and at the same time to serve as an ultra-protectionist measure calculated to benefit French industries. According to the official statement, the Directory's law of 1796 was designed to 'give new life to trade, restore manufactures, and re-establish the workshops', and, on the other hand, 'to deprive our enemies of their most important resource in waging war against us' and compel them to make peace. In complete analogy with this, Barère, the trumpeter in ordinary of the Convention, speaking in the name of the Committee of Public Safety, had justified the Navigation Act partly on the ground that 'Carthage would thereby be destroyed'—'let us decree a solemn Navigation Act,' he said, 'and the isle of shopkeepers will be ruined'—and partly on the ground that France would thereby multiply her industries, stimulate the consumption of domestic products, create her own ship-building yards, build up a flourishing mercantile marine, &c., &c. This, so to speak, dualistic character the Continental System was destined to retain but at the same time to lead to an irremediable self-contradiction.
Naturally it is true of the commercial blockades of the Revolution, as of those of earlier times, that they were not even approximately maintained; the result was that smuggling once more became one of the principal means of Anglo-French intercourse. Notwithstanding the law of 1796, the practice seems to have grown up of importing British and other prohibited goods on a large scale as captured goods. Disordered as every department of the public administration was, one can not doubt that the authorities merely winked at all this; and besides they were often obliged to mitigate the laws, as we have already seen, in order to ensure some observance of them. An example of this was given by the Navigation Act, which was introduced with such high-sounding words and a month later repealed for the most part by a number of supplementary regulations providing that certain raw materials and enemy goods might be imported in time of war by neutral vessels; shortly afterwards such vessels also received the right to carry on coasting trade.14
IT has already been intimated that, parallel with the commercial blockade, which came principally from the French side, there was taking place, mainly on the British side, a systematic persecution of trade with enemy countries, and that both of these lines of development came to be united in the Continental System. Seemingly and on paper these two lines of policy were not only separate, but also, in part, absolutely conflicting; this, in fact, has led many observers astray. But if we consider the policy of the maritime blockade with reference to its actual application, as opposed to its outward form, we find that its character, in spite of all inconsistencies and lack of precision, easily reveals as merely an outcome of the mercantilist commercial policy. In this way, consequently, the aim of the commercial war of a hundred years ago was altogether unlike that pursued in the recent World War. On this point, however, scarcely any of the usual accounts give us clear information. The majority of them take the policy of blockade as a more or less self-evident matter without inquiring into its aims. The only writer who, so far as I know, has embarked on a deeper analysis is the foremost naval historian of our time, the late Admiral Mahan of the United States Navy, who has undoubtedly cast much light on the history of the Continental System in his books, The Influence of Sea Power upon the French Revolution and Empire (1893), and Sea Power in its Relations to the War of 1812 (1905). In general, however, it may be said that Admiral Mahan is too much concerned with sea-power in itself to devote sufficient attention to its connexion with economic policy and economic activity, which after all have also a non-naval side.
In the external system of the maritime blockade the actual blocking of the enemy's ports and coasts unquestionably forms the central point. Characteristic of the system, however, was the practice adopted by Great Britain of establishing a so-called 'paper blockade', that is to say, of declaring in a state of blockade long stretches of coast which she could not or would not effectively blockade by means of sufficient naval forces, and on the strength of this declaration capturing neutral vessels bound for well-nigh any enemy port. This practice received its most extreme statement in an obiter dictum attributed to the British Admiralty Judge, Sir James Marriott, who in 1780, during the war with France and Spain, the European allies of the American colonies, declared that the ports of those countries were ipso facto blockaded by virtue of their geographic position.15 It was perhaps chiefly to this central point in the naval policy of Great Britain that the neutrals demurred. The demand that the blockade should be effectual, that is to say, that it should apply only to places which were so well guarded that vessels could not reach them without imminent danger of capture, consequently played an important rôle among the five celebrated points enunciated in 1778 by the Danish statesman, A. P. Bernstorff, and used as the foundation of the unusually successful Swedo-Dano-Russian Armed Neutrality of 1780.
MERCANTILIST IMPORT OF THE BLOCKADE
The blockade undoubtedly had its root in the idea of siege, as the Swedish international jurist, Dr. Nils Söderqvist, has pointed out; and like the siege, accordingly, it aimed in principle at a real cutting-off of the enemy's territory, especially as regards the exclusion of supplies. Here, therefore, the external contrast with the mercantilist commercial policy is very marked; for the latter, as we have seen, aimed to encourage the forcing of goods upon the enemy and would consequently have regarded a consistent application of the blockade principle as a direct advantage to the enemy country in so far as its supplies were crippled, and as an advantage to the home country only in so far as the blockade impeded the foreign sale of the enemy's own goods. This peculiar and important but usually overlooked inconsistency can be explained only by the fact that the practice of blockade arose in the pre-mercantilist period. But with the development and spread of mercantilist ideas the practice necessarily had to reshape itself; and this, in fact, was what actually happened.
The result was twofold. In the first place, blockade measures were employed to accomplish other purposes than those formally intended; and, in the second place, the regulations existing on paper were annulled, either by exceptions or by deliberate laxity in their enforcement, to such an extent as to create an order of things quite different from that which was officially prescribed.
FUNCTION OF CAPTURE AT SEA
First, then, we have to consider the employment of blockade measures for purposes other than those formerly intended. Here primary importance attaches to the fact that seizures or captures may be said to have been ends in themselves. To some extent this appears even in the relative importance of the paper blockade as compared with the effective blockade; for the former gave much greater chances of capture but, at the same time, was a far less safe means of preventing intercourse with the enemy. Moreover, two of the most important methods of blockade are largely explained when we come to consider the importance of captures—namely, the arbitrary extension of the idea of contraband and the persistent refusal of Great Britain to acknowledge the proposition that 'free ships make free goods' or that 'the flag covers the cargo', which implies that enemy goods are immune from capture on neutral vessels.
The object of this encouragement of captures for their own sake was scarcely in any notable number of cases what one would nowadays be most inclined to expect, that is, the procurement of goods for one's own use in this convenient manner. It is true that Pitt, according to a statement of the then Swedish envoy in London, Lars von Engeström—a statement, however, which is not confirmed by the brief parliamentary reports—referred in the House of Commons on November 3, 1795, to seizures of corn cargoes bound for French ports as a means of overcoming the exceptional shortage of foodstuffs in England;16 and there is also a later utterance of Napoleon to the same effect.17 But these cases would seem to be almost unique, as one might expect beforehand in view of the fact that the object of the seizures was not, as a rule, to acquire goods, but rather to dispose of them. An explanation must be found elsewhere, namely, in the fact that captures were a means of encouragement to the captors themselves; and to this point there was ascribed the greatest importance. To begin with, it applied to the great horde of privateers, who were regarded as forming a very important augmentation to the fighting forces of the country, but who manifestly could not embark on that career except with some prospect of profit. In a highly characteristic manner a well-known English international jurist, William Manning, towards the middle of the nineteenth century explained the benefit of these privateers on laissez-faire lines. 'They increase the naval force of a state,' he said, 'by causing vessels to be equipped from private cupidity, which a minister might not be able to obtain by general taxation without much difficulty'.18
EVIDENCE OF JAMES STEPHEN IN 'WAR IN DISGUISE'
But this held good, not only of the privateering fleet, but also of the Royal Navy itself, in which captures formed a source of income to commanders and crew that was of the greatest importance in stimulating their willingness and zeal. How deeply rooted this opinion still was only a hundred years ago is best illustrated by a book of that time which perhaps, on the whole, gives a clearer notion of the pre-conditions of the policy of blockade than any other, namely, James Stephen's War in Disguise; or, the Frauds of the Neutral Flags, which was published the same day as the battle of Trafalgar (October 21, 1805) and within four months appeared in three British and two American editions.
The importance of this book—which, significantly enough, was republished during the recent World War as a contributory aid to the solution of its problems—will appear in several places later on, and a few words about its author, therefore, seem in order. James Stephen, father of Sir James Stephen (nicknamed 'Mr. Over-Secretary Stephen') and grandfather of Sir James Fitzjames Stephen and Sir Leslie Stephen, was a barrister practising in the Prize Appeal Court of the Privy Council, the highest prize court in England. Both in this capacity and earlier as a lawyer in the West Indies, he had acquired an intimate knowledge of the conditions of trade during the long naval war, as well as of the application of the principles of law to them. Thus not only was he thoroughly familiar with matters in this department, but he was also far from representing any extreme jingo view. This is perhaps best shown by the fact that, like his brother-in-law, William Wilberforce, the great emancipator of the slaves, he was a decidedly religious person, belonging to the Clapham Sect, and devoted a large part of his life to the struggle for the abolition of negro slavery. This fact gives his utterances on captures their proper background. He dwells long on the injustice which would be inflicted on 'our gallant and meritorious fellow subjects, the naval captors,' when they were compelled to see valuable cargoes, 'their lawful game,' passing continually under their sterns. 'It is painful to reflect,' he says, 'that these brave men lose the ancient fruits of distant service, while enduring more than its ordinary hardships.' His account of the importance of capture as an inducement for seamen may be quoted in extenso:
Let us give full credit to our gallant officers, for that disinterested patriotism, and that love of glory, which ought to be the main springs of military character, and which they certainly possess in a most eminent degree. But it would be romantic and absurd, to suppose that they do not feel the value of that additional encouragement, which his Majesty and the legislature hold out to them, in giving them the benefit of the captures they make. What else is to enable the veteran naval officer, to enjoy in the evening of his life, the comforts of an easy income; the father to provide for his children; or the husband for an affectionate wife, who, from the risques he runs in the service of his country, is peculiarly likely to survive him? By what other means, can a victorious admiral, when raised, as a reward of his illustrious actions, to civil and hereditary honours, hope to support his well-earned rank, and provide for an ennobled posterity?... It is from the enemies of his country, therefore, that he hopes to wrest the means of comfortably sustaining those honours, which he has gained at their expence.
As to the common seamen and mariners, the natural motives of dislike to the naval service, are in their breasts far more effectually combated by the hope of prize money, than by all the other inducements that are or can be proposed to them. The nautical character is peculiarly of a kind to be influenced by such dazzling, but precarious prospects.19
ATTACKS ON ENEMY EXPORTS, NOT IMPORTS
With this encouragement of captures for their own sake, however, there was undoubtedly coupled a desire to cut down the enemy's trade. But this desire, too, has to be conceived in a strictly mercantilist spirit. To inflict military injury on the enemy, either directly or indirectly, was not—at least not to any notable extent—the object of the interference with his trade. On the contrary, the primary object was that of waging commercial war against him, i.e., of depriving him of a source of gain, or, in other words, beating him off the field; and, parallel with this, it was aimed to extend a country's own trade—which could be done, and was constantly attempted, at the expense, not only of the enemy country, but also of neutral countries. This brought it about that the establishment of a blockade dealt the latter a much harder blow than is the case at the present time. The intention was to prevent them from receiving any profit either from the enemy country or from other countries, and so far as possible to expel them, as well as the enemy, from sources of gain which had previously been open to them. It is perhaps not altogether clear whether considerations of this nature influenced some of the measures of the recent blockade. But however that may be, it is true that such a policy has no connexion whatsoever with the blockade of the enemy as such, but may be pursued, as actually happened a hundred years ago, purely as an end in itself. The objection to the proposition that 'free ships make free goods' was rooted in this object much more than in the inclination to encourage captures for their own sake; for as goods belonging to subjects of enemy countries were liable to seizure on neutral vessels, the neutrals were prevented from taking over the traffic which the enemy himself had been able to carry on before he was driven from the sea, as the British historian Lecky has well observed.20 And this was still more the case with the fourth of the great disputed questions concerning the law of war at sea, namely, that of commerce nouveau, or, in British terminology, the rule of 1756, the wording of which, as elaborated by British jurists, was that 'a neutral has no right to deliver a belligerent from the pressure of his enemy's hostilities, by trading with his colonies in time of war in a way that was prohibited in time of peace.' This principle prevented the neutrals from pushing their way either into the enemy's coasting trade or—and this was more important—into what might be regarded as a special form of coasting trade, namely, trade with the enemy's colonies. In time of peace both of these were jealously guarded preserves of the trade and navigation of the home country; but in time of war the belligerent power that was debarred from the sea willingly turned them over to neutrals with the double object of maintaining the traffic and of preventing it from falling into the hands of the enemy.
The characteristic difference between the policy of that time and the policy of to-day is that, when the masters of the sea a century ago tried to prevent neutrals from carrying on a certain kind of trade, their object was not to kill that trade altogether, as is the case nowadays, but to seize it for themselves. It is therefore indisputable, as the neutrals complained and as Stephen himself admits, that British vessels were allowed to trade with France, while neutral vessels were overhauled and seized.21 In full accord with this and with mercantilist trade policy, it was sought first and foremost to cut off all kinds of exports from the enemy to the neutrals, especially if they competed with those of the home country. In complete contrast with the efforts of the recent war, the endeavours of that time were aimed, on the one side, at getting rid of the excess of export goods in the home country and, on the other side, at preventing the enemy from selling his products. This was in part due to the fact that apprehensions were always felt of low prices on these goods in the home country and also of high prices in the enemy country. On the one side, therefore, the whole of Stephen's account is permeated by anxiety lest the price of British colonial goods should decline as a result of their being kept out of the continental markets by French and Spanish colonial goods. In previous wars, according to his view, the British home market, 'relieved by a copious exportation from temporary repletions,' gave them (the colonies), 'in its large and ever-advancing prices, some indemnity for the evils of the war,' while at that time, according to his statements, the prices were sinking on the Continent in consequence of the importation of goods from the enemy's colonies. On the other hand, he is dominated by dislike of the idea that the same neutral trade should provide access to America of the textile and iron goods of the Continent in competition with those of Great Britain herself. What troubled him, therefore, was not that the Continent should get colonial goods, but that it should get them from the enemy colonies, which, like the mother country itself, should be cut off from exports, he thought, but not from imports.
Finally, therefore, all this implies that no cutting-off of imports to the enemy could come into the line of the policy pursued. It denotes merely an effort to place those imports under the control of the naval power itself, so that the country might thereby give preference, so far as possible, to its own products and those of its colonies, and also so that it might take over trade and navigation with the enemy mainland. The latter consideration, however, took a secondary place, as Great Britain often had need of neutral shipping to supplement her own overworked mercantile marine; and it is especially noteworthy that the neutrals' supply of the enemy's (e.g., the French) market with the belligerent's (e.g., Britain's) own products was an all but self-evident matter, against which there was really no objection to raise from a British point of view. Manifestly, such a blockade policy diverged fundamentally from that of the recent World War.
The only substantial exception to this general tendency—and even that a very partial one—concerned import goods of purely military importance, that is too say, military supplies, naval stores, and sometimes, at least in principle, foodstuffs for the enemy's fighting forces on land and sea. These items were emphasized by Pitt, for instance, in the great speech which he delivered before the House of Commons on February 2, 1801, immediately before his retirement, in defence of the policy of maritime blockade that he had introduced. In the actual execution of the policy, however, it is difficult to find any marked traces of this; and, significantly enough, it was coolly stated in Parliament, in 1812, that the clothing of the French army came from Yorkshire, and that 'not only the accoutrements, but the ornaments of Marshal Soult and his army' came from Birmingham. The reservation was made, however, that they had not been ordered directly by the French government!22
It may be remarked in passing that Edward III, four and a half centuries earlier, had already given licences for the exportation of corn to the enemy, though the ruling thought at that time was that of procuring revenue for the Crown.23
The colonial trade, which at that time was conducted in all countries on the lines of the Old Colonial System, deserves special attention in this connexion. The fundamental idea of that system was that the mother country and the colonies should constitute an economic whole, with a strict division of labour between them, so that the mother country alone supplied the colonies with the industrial products and other things they needed, and in exchange received alone, or practically alone, the raw materials, precious metals, foodstuffs, and stimulants that the colonies produced, all with national vessels and through national merchants. In this case, therefore, not only were exports to the colonies regarded as economically profitable to the mother country, but the same also held good of imports from the colonies. Accordingly, it was considered a great triumph if a country succeeded, by means of the maritime blockade, in conveying the products of enemy colonies also to its own shores, and at the same time in preventing those products from competing with the products of their own colonies on the mainland of Europe. A great many, not to say the majority, of the controversies that arose in those days regarding the matter of the commercial blockade, especially in Great Britain and America, turned precisely on the question of colonial trade, which also quantitatively played a surprisingly great part in the total commercial intercourse of the sea-trading countries, especially through the re-exportation of colonial goods that arose out of it. Thus, according to the so-called 'official values' in the statistics of trade, the British exports of foreign goods (which means substantially colonial goods) rose uninterruptedly in the course of the revolutionary wars from 21 per cent. of the total in 1792 to 36¼ per cent. in 1800. Likewise, the French re-exportation to Europe of goods from the West Indies immediately before the Revolution was greater than the whole of French exportation of domestic staple products of the textile and liquor industries. On the other hand, the transit trade of the United States in French, Spanish, and British West Indian products increased prodigiously during the same period, representing in 1806 a value of no less than $60,000,000, or one and a half times the value of the exports of the domestic goods of the United States.24
TRADING WITH THE ENEMY
Such, then, were the purposes that the policy of blockade was intended to serve. But as has already been mentioned, the curious thing about its practical application did not lie exclusively in this alteration of its objects, but also in the fact that the policy actually pursued was in reality quite different from that which held good on paper. To some extent this was true of the measures that pertained strictly to the law of war at sea, especially to blockades; but to a still greater extent it was true of trading with the enemy. The prohibition of this was regarded, especially in Great Britain, as an indispensable principle of international law and was therefore rigorously maintained on paper; and this notion was also strengthened by the desire of every country to mark the moral gulf that should separate its own subjects from the enemy, or, as the phrase ran, 'to prevent treasonable and improper intercourse'.25 But there was not the slightest idea of carrying out this fundamental principle in practice. With almost grotesque force the contrast between theory and practice is brought out in one passage in Stephen's book in which he discusses the objection that might be raised against his pleadings in favour of measures against neutral trade, namely, that they would plunge Great Britain into war with the then neutrals and thereby impede her exports. He goes on to say:
Is it asked, 'Who would afterwards carry our manufactures to market?' I answer, 'Our allies, our fellow subjects, our old and new enemies themselves.' In the last war (1778-1783—when Spain and Great Britain were enemies) nothing prevented the supplying of Spanish America with British manufactures, in British bottoms, even when they were liable to confiscation by both the belligerent parties for the act, but that the field of commerce was preoccupied, and the markets glutted by the importations under neutral flags.
But would I advise a toleration of these new 'modes of relieving the hostile colonies'? Its toleration would not be necessary. Even your own hostilities would not be able to overcome the expansive force of your own commerce, when delivered from the unnatural and ruinous competition, of its present privileged enemies. You might often capture the carriers of it and condemn their cargoes; but the effect would chiefly be to raise the price upon the enemy, and the difference would go into the purses of your [prize-taking] seamen. The prize goods themselves, would find their way from your colonies into the hostile territories.26
It would be difficult to find a more typical example of the capacity to 'make the best of both worlds'. The legal principle of prohibiting trade with the enemy was constantly maintained, while at the same time full provision was made for exports above all to the enemy, which according to the deeply rooted ideas of the time was of vital interest to the country. The same combination of incompatible views is revealed in almost every utterance that has come down from that time; and when the will existed, it was not difficult to find means for its realization. One of these means was the system of licences, of which Stephen says that 'papal dispensations were not more easily obtained in the days of Luther'. Another means was the system called 'neutralization,' whereby vessels and cargoes that in reality belonged to one or another of the belligerents were declared on sworn—that is to say, perjured—evidence, to belong to neutrals. These tactics—which, however, were sometimes turned against the belligerents themselves, and in such cases were combated both by the law courts and by the supporters of the official policy—were employed on a strictly business basis, commonly with a commission of 1-2 per cent. for the firm that handled the transaction. Especially Emden, in East Friesland, which belonged to Prussia and was consequently neutral, was a centre for transactions of this nature, and there were loud complaints against British marine insurance firms which bound themselves, against a special premium of 1 per cent., not to urge the legally valid plea against the enemy origin of the cargoes, which by law always involved the invalidity of the insurance. Besides this, moreover, there always remained the possibility of winking at an illegal practice which there was no intention of preventing; and it is characteristic of the situation that in the year 1794 Swedish captains openly declared to the British customs officers that their vessels were bound for a French port.
Trading with the enemy also appears as a fairly self-evident practice in nearly all accounts of the commercial conditions then prevailing. This is revealed, for instance, by the British trade statistics themselves, which show that the share of the enemy countries, France and the Netherlands (northern and southern), in the total exports of Great Britain declined only from 15 to 12 per cent. in the years 1792-1800. This, too, is conclusive evidence in support of Stephen's proposition as to the impossibility of war measures adopted by Great Britain to the end of overcoming the expansive force of her own trade.27
Following this hasty sketch of the general character of the maritime blockade policy of that time, it seems expedient to show in a more concrete form the development of those measures during the years from the intervention of Great Britain in the revolutionary wars in 1793 down to the Peace of Amiens in 1802. It contains, indeed, a good deal which may be of value, not only in throwing light on the general situation at that time, but also in furnishing a background for what was to come later.
BRITISH MEASURES (1793-1802)
The measures adopted at the beginning of the maritime blockade in 1793 exhibit marked resemblances to the corresponding measures adopted during the recent World War, and are therefore of especial interest and importance. As early as February 14, that is to say, a fortnight after the outbreak of the war, Great Britain authorized the capture of all vessels and goods belonging to France; and in the following month she proceeded to work. On April 4 she proclaimed all her most advanced principles concerning the law of war at sea, and on June 8 she introduced the most famous of her measures, namely, the instructions of 1793, whereby fleet commanders and privateers were authorized 'to stop and detain all vessels loaded wholly or in part with corn, flour, or meal, bound to any port in France or any port occupied by the armies of France', with the understanding that the British government would purchase the cargo with the proper allowances for freight, called 'pre-emption'. This measure took the form of a plan to starve out France. Count Axel von Fersen, the chivalrous young Swedish nobleman who, as is well known, was one of the most active allies of the French émigrés, had emphasized this, as early as April 29, in a letter addressed to the Regent of Sweden, Charles Duke of Södermanland; and in a notification of the measure addressed to the Baltic powers, especially one to Denmark in July, Great Britain justified her June instructions in a manner very similar to that in which the policy of starving out Germany was justified during the recent war. The notification declared that the war was being conducted in a manner contrary to the principles of international law, that France had no recognized government, and that the corn trade had been taken over by the French authorities themselves, that is to say, had become an act of the enemy's own government; and, finally, the blockade against imports was represented purely as an important means of forcing the enemy to make peace. Lars von Engeström hit the mark in describing the tendencies of that time—as also those of the World War—when he wrote that the struggle 'had passed into a kind of political war of religion'.
A genuine blockade of the importation of foodstuffs into France might therefore have been expected, that is, a 'starving-out scheme' similar to that of the World War. In a way such a plan might even have been made to harmonize fairly well with the continental economic policy of that time, at least until the French Revolution; for as a matter of fact, the prevailing note on the subject of foodstuffs continued to be the pre-mercantilist tendency to prevent exports, rather than the mercantilist one to encourage domestic production by hampering imports and facilitating exports. As has been already mentioned, however, Pitt's justification for the seizures was not based on this notion, but on Britain's own quite temporary need of foodstuffs—according to Lars von Engeström's statement;28 and evidence of how deeply rooted the notion of the inexpediency of preventing imports to the enemy was is furnished by the fact that the ensuing developments did not at all follow along the lines which were indicated in the first measures. Only fourteen months afterwards, on August 18, 1794, the previously cited article in the June instructions of 1793 was repealed, and this meant that the importation of corn into France was again permitted. It is true that in the following April a new attempt was made to put the instructions of 1793 into force, but this was done chiefly with the object of forcing the United States into a ratification of the celebrated Jay Treaty of 1794. That, however, wound up the whole of this episode, so that throughout the entire period of the twenty years that still remained before Europe obtained a lasting peace, not a single attempt at starving out France was made, so far as we know, nor were there any further efforts to stop her imports on the part of the power that had the command of the sea. Against only one small country, Norway, did Great Britain occasionally make use of her ability to prevent the introduction of supplies, for reasons which will be discussed in due time.
In contrast with these sporadic attempts to prevent importation into France, the regulation of the trade with the French and Spanish colonies continued throughout the war, that is, until the Peace of Amiens in 1802; and this became the starting-point of the events that were to take place during the period of the Continental System proper. Here, too, there was a certain amount of wavering on the part of Great Britain, but the general principles were maintained with a consistency wholly different from that shown in the other case. A beginning was made with the celebrated instructions of November 6, 1793, which aroused the particular animosity of the neutrals, especially the United States, for the reason that they prescribed the capture of all vessels carrying the products of the French colonies or conveying supplies to them. Shortly afterwards, however, these draconic orders were revoked as a concession to the United States, and their place was taken by the new instructions of January 8, 1794. These restricted the order concerning capture to vessels proceeding directly from the West Indian colonies of the enemy to a European port; and this, in turn, opened up the possibility of a so-called 'circuitous voyage' via some neutral extra-European port, that is to say, primarily an American port, but also possibly a Danish or Swedish colonial port. Nevertheless, it was provided that the products of enemy colonies should have become neutral property in order to be loaded, and that blockade-running vessels, as well as vessels conveying naval stores or munitions of war to the enemy colonies, would be liable to capture. These regulations were further modified by the new instructions of January, 1798, which both abolished the requirement that the colonial goods should have become neutral property and also, and above all, permitted direct traffic to a European port, that is, a port belonging to the British Empire or to the home land of the neutral vessel. This stipulation in favour of a British port is of especial interest in that it furnishes evidence of the British design to attract to Great Britain the trade even in the products of enemy colonies. As Admiral Mahan has rightly remarked, it was an outcome of the effort characteristic of the old colonial system to create in the home country a staple or entrepôt for colonial goods. In point of fact, the instructions of 1798 remained in force until the termination of the revolutionary wars in 1802.29
In comparison with the treatment of neutral shipping in the recent war, these orders do not present a very strict appearance; for at the present time the belligerent that is dominant on the seas tries to cut off practically every sort of neutral intercourse with the enemy over such waters as it commands and even, to some extent, over other waters. But one must not overlook the fact that privateering, which it was in many ways almost impossible to distinguish from piracy pure and simple, and even the private interests of the crews of war-ships in effecting captures, brought about an arbitrariness and a brutality in the treatment of maritime commerce which is unknown to-day. This has been copiously illustrated by the recently deceased Danish historian, Professor Edvard Holm, whose account undeniably gives one the impression that the trials and troubles of neutral trade, even during the first years of the revolutionary wars, in practice exceeded even those of the present time, even though its chances of profit, as far as we can judge, were greater. Nevertheless, the acts of the belligerents during those first years were almost deeds of mercy in comparison with what was to come; and the new departure was the work of the new French policy. Like most of the measures of the French revolutionary governments, the measures against maritime trade were marked by a combination of violence and impotence; but they were so far explicable because the British application of the laws of war at sea rendered French navigation all but impossible. As usual, the principal sufferers in the end were the neutrals, and this time the measures of violence against them were carried to the most extreme limit that had yet been reached.
FRENCH MEASURES (1793-1799)
At first the measures of France had been considerably milder than those of Great Britain; and this was natural enough in view of the fact that France stood in great need of the help of neutrals. By a law passed on May 9, 1793—that is to say, before the British instructions of June 8, but after the declaration of April 4—the Convention ordered that all neutral vessels conveying foodstuffs to an enemy port or carrying goods belonging to the enemy should be captured and conducted into a French port. Such vessels were to be fair prizes, and their cargoes were to be purchased on behalf of France. But the French purchase regulations themselves were more favourable to the neutrals than the corresponding British ones; and at the same time it was declared, in the same way as afterwards under Napoleon, that the orders would be abolished as soon as the enemy on his part granted the unrestricted importation of foodstuffs into France.
At first the practice, too, was milder on the French side. Gradually, however, French policy turned completely around; and it was not long before the new tendency acquired official form. On July 2, 1796 (Messidor 14, year IV), the Directory categorically declared in an ordinance of only a few lines that British methods were to be applied against the neutrals in every respect. The culmination, however, was reached in the notorious law of January 18, 1798 (Nivôse 29, year VI), which laid down that the nationality of a vessel should be determined by its cargo, so that if any vessel was carrying goods of any kind coming from England or its possessions, no matter who was the owner, this fact alone should justify the confiscation, not only of these goods, but also of the vessel itself and its entire cargo. Moreover, any vessel that had touched at a British port was forbidden to put in at any French port; and earlier it had already been made a practice to seize vessels bound for a British port.
It would have been difficult to go farther; and this time actions were not milder, but still more violent, than words. From the two years or so during which the law of Nivôse was in force come all the wildest examples of high-handed procedure on the part of belligerents on the seas. It was especially Scandinavian vessels that were exposed to this reign of terror, while the only important neutral power besides Sweden and Denmark and Norway, namely, the United States, began what was practically a privateering war against France without any formal declaration of war. The French law came into force without any preliminary warning, so that vessels which had sailed without knowledge of its provisions fell helplessly into the hands of captors; and once seized, their chances of escape were very small indeed. With the importance that British industry had now acquired, in fact, it was almost impossible for a vessel to sail without having on board some article of British origin; and it was not at all necessary that these articles should constitute its cargo, in the strict sense of the term, to seal its fate. A woollen blanket on the skipper's berth, a few sacks of British coal for the ship's stove, British earthenware used by the crew, the British metal buttons of the skipper's coat, etc., were sufficient to lead to confiscation. Indeed, the old Hamburg economist Büsch gives us in one of his last works, that bearing the exquisite title of Ueber das Bestreben der Völker neuerer Zeit, einander in ihrem Seehandel recht wehe zu thun (1800), such an example as this: Once when a French captor, quite exceptionally, did not succeed in finding anything British on board a captured vessel, two of the sailors were bribed to disclose the alleged fact that the skipper had had a pair of English boots which he had thrown overboard on the approach, of the captor; and that, says Büsch, was enough to bring about the confiscation of the cargo.30 In a suit against five Danish East Indian vessels bearing rich products obviously of Danish origin, the captors succeeded in having the cargoes condemned on the ground that Lascars included in the crews were British subjects; and in other cases vessels and cargoes were condemned on the ground that the former had been built in a British shipyard and had been bought after the outbreak of the war—in spite of the fact that the vessel was a French prize and had been sold to its then Danish owner by the French captor.
Justice was indeed a parody. Those who acted as judges were ordinarily the consuls in the most important haunts of the privateers, with whom they often acted in collusion; nay, some of them were themselves ex-privateers or even still commercially interested in the captures—an example which one of Napoleon's governors was destined to follow in the fullness of time.31 The abuses increased to such an extent that they completely outgrew the control of the weak government of the Directory. On one occasion, for example, Reubell, one of the members of the Directory, informed the Danish minister in Paris that a French prize court had condemned and caused to be sold for the benefit of the captor, a Swedish vessel with a cargo destined for the French government itself. Moreover, the privateers worked into each other's hands in various ways. Thus one of them might rob a neutral vessel of its ship's papers in order that another might seize it with impunity; for without papers its condemnation was certain.
What is peculiar in the policy of the Directory, and at the same time significant for the ensuing developments, is the fact that it had the effect of a French self-blockade. It is indeed manifest, as Admiral Mahan points out, that the power which was excluded from the sea was the one which really had need of the neutrals for the procurement of its supplies, and which, therefore, from a purely material point of view at least, had the most to lose by a course of violent action against them. 'Every blow against a neutral,' he says, 'was really, even though not seemingly, a blow for Great Britain.' During the period of scarcely two years in which the law of Nivôse was in force, it practically did away with that neutral trade and navigation with France which was to some extent independent of Great Britain. Neutral vessels, in fact, did not venture there, so that even during the year 1798 their coasting trade in France declined by two-thirds and their foreign trade with the same country by one-fourth. Moreover, the obstacles that French captures placed in the way of free navigation brought it about that neutrals in general were pushed back; and this, of course, was an advantage to Great Britain, which was enabled by her command of the sea to protect her trading vessels by means of convoys. The latter obstacle in the way of neutral shipping was of less importance than the former, however, because the two neutral Scandinavian states also fitted out convoys in common on the basis of the League of Armed Neutrality of 1794. This had excellent commercial results, at least for Denmark, but the French policy caused it to be of very little benefit to France. Nor did the latter country receive any compensations whatever for its own shipping, for according to the Directory's own declaration, in 1799, the British blockade had been maintained so strictly that not a single vessel was sailing the seas under a French flag.
It was therefore quite natural that Napoleon, as early as December, 1799, that is, shortly after his accession to power, should repeal, or cause to be repealed, the law of Nivôse and revive the more moderate regulations of 1778 (law of Frimaire 23 and ordinance of Frimaire 29, year VIII); and at the beginning of the following year he did away with some of the worst abuses in the administration of prize-court justice by instituting a Supreme Prize Court in Paris. In principle, however, his later policy was to be a faithful reflection of that of the Directory, as will be shown in due course.32
THE Continental System originated, therefore, on the one side, in a blockade that followed the general lines of mercantilist trade policy, especially on the part of France, and, on the other side, in a maritime blockade dominated by the same ideas which proceeded from Great Britain but was imitated in still more intensified forms by France, where, owing to the British mastery of the seas, it acquired the character of a self-blockade. To complete the antecedent conditions of the Continental System, consequently, there is only one feature lacking; but it is the feature which has given the policy itself its name, that is, the combination of the European countries to the exclusion of Great Britain, which, supposing that the same conditions held good as before, means a common self-blockade of the Continent as against Great Britain.
This feature did not become significant until the time of Napoleon, for until then the external means of exercising power, as well as the great political personality it demanded, were still lacking; but recent Napoleonic research has taken great pains to demonstrate that it was significant even during the preceding period. From the beginning of history the community of nations has always looked upon commercial countries with a certain jealousy and suspicion; and in this respect, as has already been said,33perfide Albion inherited the feeling which had once been fostered against its rival, the United Netherlands. This feeling was further intensified by the unpalatable experiences of both enemies and neutrals during the incessant wars, on account of Great Britain's ruthlessly applied methods of naval warfare. There is nothing surprising, therefore, in the fact that plans were formed for the exclusion of Great Britain. What is remarkable, on the contrary, is the fact that nobody, so far as is known, has yet succeeded in showing the existence of any such plans other than those emanating directly or indirectly from French sources. Examples of this kind have a great interest of their own; but they are too patent to call for any detailed investigation.
As early as 1747 we know that proposals were brought forward in the French Bureau de Commerce to unite France, the Hanse Towns, Prussia, and the Scandinavian powers for the purpose of crushing the maritime power of Great Britain—probably a mere incident in the long-standing Anglo-French duel.34 But it was not until after and in consequence of the outbreak of war between Great Britain and France in 1793 that this tendency acquired any lasting significance. The attitude took one or another of two forms, according to circumstances: either all the continental countries were regarded as commercially dependent on England, and therefore as necessary objectives in the military and economic war waged by the French republic against its foremost enemy; or else, contrariwise, they all had the same interest in crushing the power of England and were thus the natural allies of France.
The attitude appears in the first of these two forms in a great speech which the Girondist naval officer, Kersaint, delivered in the Convention on January 1, 1793—that is to say, before the outbreak of war—and in which he exhorted his countrymen, with the usual revolutionary eloquence, to face the struggle with the whole world. In his opinion, France alone had her own industry and wealth, while Spain, Portugal, Holland, and the Italian republics worked largely with British capital and British goods. The New World and Asia, he said, were likewise economically dependent on Great Britain; nay, even the trade of Denmark (i.e., Norway), Sweden, and Russia in naval stores was made possible by the co-operation of British capitalists. 'One cannot find on the face of the globe,' he declared, 'any lucrative branch of trade which has not been exploited to the profit of that essentially shop-keeping people.' In consequence of this, he argued, the injuries inflicted on the states of the Continent fell finally on Great Britain, for whose benefit that economic life was carried on, a view which Napoleon was afterwards destined to push to the extreme. Asia, Portugal, and Spain were regarded by Kersaint as the most important markets for British industry, and they were to be closed to Great Britain by being opened to the rest of the world; Lisbon and Brazil were to be assailed; support was to be given to the old adversary of the British in India, Tippoo Sahib, &c.35
Thus Kersaint not only passed over the United States, the undiminished importance of which for British trade does not appear to have been fully recognized in France, but also disregarded Germany and the European mainland proper, as distinguished from the coastal and peninsular fringes referred to above. As a rule, however, Germany was a factor of considerable importance in these efforts. To begin with, the prohibition of 1796 against British goods was extended in March, 1798, to the left shore of the Rhine, which was then united with the French republic; and this prohibition was applied with a strictness which, in an account of the situation written in 1798 and ascribed to Napoleon, was alleged to presage (ébaucher) the Continental System.36 For the rest, it was mainly a matter of paper projects and pious wishes, not of effective measures, and the majority of them concerned the German North Sea littoral. Here, as a rule, it was the other side of the policy that was turned outwards, that is, the common interests of all the continental states against Great Britain. A writer of German birth, Ch. Theremin, who was later to serve Napoleon in various posts in Germany, published in Paris in the year III (1794-5) a pamphlet with the significant title Intéréts des puissances continentales relativement à l'Angleterre, in which the afterwards well-known doctrine of the natural and inevitable conflict between Great Britain and the Continent was developed at length, and the hostility of the other continental states to France was shown consequently to be contrary to their own best interests. A year or two later, at the beginning of the Congress of Rastadt in 1797, plans were made to bar the mouths of the Elbe and the Weser to the British; and at the same time it was proposed, in a paper now preserved in the archives of the French Foreign Office, that Hanover and Hamburg should be transformed into a republic allied with France, which afterwards was to be joined with the great North German rivers by an extensive system of canals. Aside from its strategical advantages, it was thought that this would establish a commercial combination which would lead to increased sales for French goods and to an embargo on British industrial products. In the same year (1797) this project called forth a refutation published by an anonymous German 'citizen of the world', who turned out to be a true prophet in his exposition of the futility of all efforts to shut out the British. In his opinion, which subsequent experience was destined fully to confirm, the British, under the protection of Heligoland, would divert their trade to Tönning in Holstein and thereby ruin Hamburg and Bremen. He also reminded his readers that the prohibitory measures of the French republic against British goods had so far led to nothing more than an immense system of smuggling.
It was precisely Hamburg that was the central point of the early French efforts to exclude England. The French envoy there, Reinhard, the son of a Swabian clergyman, spoke as early as 1796 of the necessity of preventing the importation of British goods, the exclusion of which from the French market alone he considered at that time sufficient to ruin England. At the beginning of 1798, however, shortly before his removal to Tuscany, Reinhard—chiefly, it is true, in order to protect the Hanse Towns, the prosperity of which he had several reasons to promote—emphasized the necessity of combining all the continental states in such a policy of exclusion. That object would be attained through the active co-operation of Denmark and Prussia with the passive support of Russia; but that would not be possible so long as only the Hanse Towns took part, for in that case the goods might come in across Holstein, that is to say, from the Danish side, through Altona, which was quite close to Hamburg.
About the time of Reinhard's departure, in 1798, there arrived in Hamburg an emissary from the Directory's Minister of Police charged with the mission of combining the many French republicans there in the adoption of measures against British trade. This agitator, a well-known Jacobin named Léonard Bourdon, aroused the horror of the Hamburg city fathers by assembling his fellow countrymen and exhorting them to boycott British goods and also to act as spies upon the commercial activities of Great Britain. Moreover, the draconic French prohibitions on the importation of British goods, to which we have already referred,37 had effect outside the boundaries of France. Thus Reinhard speaks of the consternation that the prohibitions of 1796 aroused in the Hanse Towns, which had been wont to supply France with those goods.38
The importance, for the general policy of the French revolutionary governments, of all of these plans for the exclusion of Great Britain from the European Continent, forms, as one may easily surmise, a principal theme in Sorel's book.39 He seeks to show that the French programme of foreign policy—the 'natural frontiers' (the Atlantic Ocean, the Rhine, the Alps, and the Pyrenees)—necessarily involved a recognition of these conquests on the part of all other powers, and that the acquiescence of Great Britain could not be enforced except by attacks on her trade; and that this, in its turn, could be effected only by a continental blockade, 'a formidable and hyperbolical measure, out of all proportion to the object that necessitates it, but nevertheless the only one that can be adopted'. One need not accept the logic of this argument as irrefutable—the point about the imperative necessity of British recognition of the new conquests seems particularly weak—to admit that such thoughts must have occupied the minds of the French politicians who, under various names, guided the destinies of France during the six or seven years that intervened between the outbreak of war in 1793 and Bonaparte's definitive accession to power in 1799. There can be no doubt, therefore, that notions of that character had lain at the foundation of the majority of the legislative measures previously treated. Thus Lecouteulx, the representative who in 1796 reported to the Conseil des Anciens upon the legislative proposal for the exclusion of British goods, justified the measure on the ground that the flags of France and her allies floated from Emden to Trieste, and that almost all the ports on the coasts of the European ocean were closed to Great Britain. Consequently, he concluded, 'we must put an end to the voluntary subsidies which consumers of British goods are paying to that country'.40
With regard to foreign policy proper, Sorel has brought forward a multitude of examples bearing witness to the same tendency, some of the more significant of which may be mentioned here. Thus about 1794 Caillard, a French diplomatist, proposed that the Continent should be closed by a series of alliances. 'From the Tagus to the Elbe,' he declared, 'there is no point on the mainland where the British should be allowed to set foot.' In 1795 efforts were made to hand Portugal over to Spain, in order thereby 'to deprive England of one of her most valuable provinces'; and the closing of the continental ports was now to affect the whole coastline from Gibraltar to the island of Texel, outside the Zuider Zee. The same tendencies, moreover, determined French policy with regard to Naples and Belgium. In the early part of 1797 Haugwitz, the Prussian foreign minister, wrote in a memorandum intended for the Russian government that there could be no doubt as to the intention of the Directory to seize the coast of the North Sea as far as the mouth of the Elbe, as its plans were known to be to isolate England, separate her from the Continent and exclude her shipping from the ports of the Mediterranean, the Atlantic and the North Sea. About the same time the American minister in London reported—incorrectly at the time, it is true, but evidently in accord with current rumours—that France had demanded the cessation of trade between the Hanse Towns and England and, its demand having been refused, had recalled its minister there.41 The Baltic Sea was also to be closed to the British in 1795 by playing Sweden and Denmark against Russia, which for the moment was on friendly terms with Great Britain. But the most characteristic example of all these forerunners to the policy of Napoleon can be found in the instructions (cited by Sorel) to the French envoy at The Hague, dated Fructidor 6 and 7, year III (August 23-4, 1795). This deserves to be cited verbatim:
The alliance with Holland offers the most important result of all, namely, to exclude the British from the Continent, to shut them out in war time from Bayonne to north of Friesland and from access to the Baltic and North Seas. The trade with the interior of Germany will then return to its natural channels.... Deprived of these immense markets, harassed by revolts and internal disturbances which will be the consequence, England will have great embarrassments with her colonial and Asiatic goods. These goods, being unsaleable, will fall to low prices, and the English will find themselves vanquished by excess (vaincus par l'abondance), just as they had wished to vanquish the French by shortage.
In this utterance the familiar policy of strangling exports finds clear expression, and its agreement with the whole of Napoleon's motives for the Continental System is very striking. An excellent parallel, for instance, is exhibited by the boastful survey that was laid before the Corps législatif in 1807.42 But this process of thought must also be examined in connexion with the views of the French revolutionaries, afterwards taken over by Napoleon, as to the implications and foundations of the economic strength of Great Britain; and the instructions of 1795 thus form a convenient transition to that instructive chapter.
ECONOMIC POSITION OF GREAT BRITAIN
'THE Causes of the Rise and Decline of Cities, Countries, and Republics,' Die Ursachen des Auff und Abnehmens der Städt, Länder und Republicken—to quote the title of a book by the German mercantilist, Johann Joachim Becher—have always formed, and still form, a very obscure chapter in economic history, and one which has been far from fully elucidated by economic inquiry. During the period with which we are now concerned the stability of the position of England as the leading maritime and colonial nation, after the relative decline of the Netherlands, formed a constant source of speculation and doubt. It was perhaps natural that this mistrust was most prevalent in French circles, and particularly among the French revolutionaries; for to those who had been trained in the school of Rousseau it was necessarily quite obvious that an organization so completely detached from the land was unnatural and, therefore, not durable—all the more so for the reason that physiocracy, so far as its influence was to be taken into account at all, might also lead to the same conclusions. The hollowness of the English economic system is also the burden of the often quoted official speech in which Brissot, the leader of the Girondists, on January 12, 1793, laid before the National Convention the whole argument in favour of a war with England, in terms which were to be re-embodied in the final declaration of war. 'We must tear asunder,' he declared, 'the veil that envelops the imposing colossus of England.... When the well-informed observer regards this imposing scaffold of English greatness, he is able to penetrate to its internal vacuity.... Say, then, if it will not be an easy matter to overturn a power whose colossal stature betrays its weakness and calls for its overthrow.'43
This representation of 'perfidious Albion' as a colossus with feet of clay is of frequent occurrence, whether it signifies merely what people wished or what they actually believed, or—what is most likely—something betwixt and between. In Napoleon, too, it was based on a general economic conception, namely, that a country's trade is of slight value in comparison with its industry and agriculture; and this could not fail to react on his conception of the strength of the foremost commercial nation. The well-known French chemist, Jean Antoine Chaptal, Minister of the Interior under the Consulate, and afterwards closely connected with the industrial policy of the Empire, describes in his memoirs Napoleon's dislike of merchants, who only exchanged goods, he said, while manufacturers produced them, and who with a turnover of a million gave employment to only two or three assistants, while manufacturers with the same turnover supported five or six hundred families. And that Chaptal is here correctly reporting Napoleon's conception—which, in that case, would not greatly diverge from that which is still popular—seems all the more probable when one considers the perfect coolness with which the Emperor from the very first prophesied that the Continental System would ruin, under his direct or indirect rule, such commercial towns as Lyons, Amsterdam, and Rotterdam.44
BRITISH NATIONAL DEBT
But the belief in the instability of the position of Great Britain arose not only from general economic conceptions of this nature, but also from numerous actual conditions and developments which could not but denote the beginnings of economic decay. It cannot be sufficiently emphasized how long people had believed they had seen signs of this. One of the most important of these signs was the rapid increase in the British national debt during the time with which we are concerned—especially when considered in the light of the generally current notion that such a development must inevitably lead to national bankruptcy. The economic literature of England herself during the eighteenth century is full of Kassandra-like prophecies as to the impending ruin of the state owing to the augmentation of its liabilities. In fact, Lord Macaulay says in a well-known passage that, with the exception of Burke, no author since the founding of the English debt had perceived the security which the general economic development of the country provided against these dangers. Especially interesting in this connexion is Adam Smith's gloomy representation of the state of affairs, the view of the European national debts presented in the Wealth of Nations being throughout remarkably pessimistic for so optimistic a writer. In Adam Smith's opinion, the funded debts 'will in the long run probably ruin all the great nations of Europe', as they had already steadily weakened them. And even though he believes that England, owing to her better system of taxation, is in a better position than most countries to stand the strain, he warns his readers 'not even to be too confident that she could support, without great distress, a burden a little greater than what has already been laid upon her'.
When this was written, in 1775, the funded British debt was £124,000,000, and the war with the American colonies, which intervened between the first and third editions of the Wealth of Nations, served nearly to double that amount. When Great Britain plunged into the revolutionary wars at the beginning of 1793, in fact, her national debt amounted to £230,000,000. Afterwards the war was financed to such an extent by means of loans that the funded debt for Great Britain and Ireland at the time of the Peace of Amiens, in 1802, had risen to what was, for the conditions of that time, the truly astounding sum of £507,000,000—a figure the significance of which is perhaps best made clear when one reflects that the funded debt of England at the outbreak of the World War in 1914 amounted to no more than £587,000,000. Under these circumstances Adam Smith's warning could not fail to make an impression; and indeed we find it employed as a main weapon against Great Britain in a pamphlet published in 1796 with the significant title, The Decline and Fall of the English System of Finance. The author was the well-known republican and free-thinker, Thomas Paine, who had some years previously fled to France and become a member of the National Convention. In the French journalism of the period dealing with this subject, which has been sketched by an English woman historian, Miss Audrey Cunningham, an impending British state bankruptcy figures as a fairly self-evident prospect in the future. This is especially the case in a very measured paper, Des finances de l'Angleterre, written in 1803 by the French littérateur, Henri Lasalle, and reproduced by Miss Cunningham in extenso.45
It is true that we must beware of overestimating the importance of these views. It would be hard to discover, as a matter of fact, anything more hopelessly shattered than the finances of France herself during the Revolution; and her capacity to develop a great military power, despite the most thorough-going national bankruptcy, might rather be expected to have implanted doubts as to far-reaching political consequences arising from financial difficulties. But the thoughts of leading French statesmen did not move in that direction. Whether because of sincere conviction or because of the effect on public opinion, therefore, it became in due time an axiom of Napoleon that his finances both in war and in peace must be managed as much as possible without loans; and his ministers of finance, greatly against their will, had consequently to resort to the most dubious means of raising funds—not only increasing the annual deficits in the national budget, but also sanctioning measures of downright dishonesty against the purveyors to the state—rather than negotiate public loans. Thus the accumulation of debt represented to Napoleon, at least officially, the one great danger to a state's existence. From the pedestal of public financial virtue he could then condemn the heavily indebted Great Britain; and he naturally did not neglect the opportunity to do so.
But the belief in the dangers of piling up debt were scarcely due to this contrast alone, the deceptiveness of which can hardly have escaped Napoleon's notice. It was also rooted, we may be sure, in a deeper conviction, namely, in the notion of the artificiality, the unnaturalness, of the economic system of Great Britain, in comparison with the well-grounded prosperity of France. Especially typical of the French view is a passage in Brissot's previously cited speech, in which he says that England had no security—'not a single hypothec'—to offer for her loans, while France, to begin with, had three milliards in properties recovered by the Crown, as well as in the riches of the land and of industry, 'the enormous resources which have long since been consumed by the claims of British ministers'. The fact that these 'hypothecs', which formed the guaranty of the French paper currency (assignats), had already, at the time of Brissot's speech, allowed the currency to decline to one-half of its nominal value, and did not prevent it from sinking to less than one three-hundredth thereof, did not serve to destroy the belief in their importance for the national credit. The intangibility of a credit system like that of Great Britain caused French observers quite honestly to doubt its staying power; and, as usual, this held good of Napoleon quite as much as of the revolutionary politicians. As a matter of fact, Napoleon's amateurishness in dealing with matters of credit is revealed in practically every line he wrote on that subject and is also confirmed by the evidence of the people around him.46
BRITISH CREDIT SYSTEM
To all this, however, must be added the fact that there were not lacking signs calculated to arouse genuine doubts, even in fairly penetrating observers, as to the durability of the British system of credit. The main cause of this was the Bank Restriction Act of 1797, whereby the Bank of England was released from the obligation to redeem its notes, an obligation which it did not resume for a period of twenty-two years. Thus Great Britain had a paper currency throughout the whole of the revolutionary and the Napoleonic periods. That this was a great and unexpected blow, especially for admirers of the British credit system, is fully substantiated by what Mollien, Napoleon's future minister of finance, writes about the matter in his Mémoires d'un ministre du trésor public. The fact is that Mollien, through impressions received partly from Turgot's most faithful collaborator, Malesherbes, and partly from his father, a French manufacturer, was entirely dominated by economic liberalism, and that to a far greater extent in the English form, as embodied in Adam Smith, than in the French form as embodied in physiocracy. In his memoirs, which were begun in 1817, but which were founded, according to his own statement, on almost daily jottings, he refers to the strong impression which the British Bank Restriction Act had made on him when he was a man of forty and experienced both as a financial official and as a practical manufacturer. Inasmuch as the Bank of England was solvent, he believed that it was in a position to meet its liabilities without loss to its creditors; but in that case, he says, its notes would decline in value, the British Exchequer would have to close, &c.; and he adds: 'Those who have long prophesied disturbances and ruin for England have never had greater reasons for their gloomy forebodings.' The remarkableness of the situation made such an impression on Mollien that at the close of the following year he went so far as to make a flying journey of observation to the enemy's territory, via Germany, with the Wealth of Nations as his only companion.47
During the first decade of the British paper currency, that is, from 1797 to about 1808, the depreciation of the bank-notes, as measured by the price of bullion and the rates of foreign exchange, was only intermittently (principally in the years 1800-2) of any very great importance. During that period, therefore, there was no great danger to be seen in the irredeem-ability of the notes, and least of all any danger to the public finances of Great Britain or to her credit system in general. But ideas on this subject being as thoroughly misty as they were, it is perhaps almost natural that the situation should have been misunderstood. In Great Britain not only the politicians, but also the bankers and business men, obstinately refused to recognize any real depreciation of the notes, even when it became, in the course of time, very considerable. In France, on the other hand, the people, under the influence of the woful history and far-reaching injuries done by their own assignats, saw a peril overhanging England in the mere existence of an irredeemable paper currency. The contemporary literature previously cited48 abounds with such views; and during his reign Napoleon never failed to boast it as absolutely inconceivable that a government so extremely well organized as his should ever have to fall back upon such a disastrous expedient as the use of paper money, 'the greatest foe to the social order (l'ordre social),' of which 'the history of all times confirms that its fatal experiences occur only under emasculated governments'.49
But all this could at the most show the weakness of the economic position of Great Britain, and thus inspire a general hope of success in the struggle against such an enemy. It had apparently no direct connexion with that special kind of tactics in commercial war which is called continental blockade. Such a connexion does not appear until we come to consider the importance that the trade of Great Britain, and especially her exports to the Continent, were regarded as having for her credit system, and in general the conception of the effect of the continental connexions on British currency.
EXPORTS AND WAR ON THE CONTINENT
In this respect, too, Kersaint's previously cited speech of January 1, 1793, is significant, as was pointed out as far back as 1850 by the first historian of the Continental System, Kiessel-bach, and has been emphasized in our own time by the English historian, Dr. J. Holland Rose. 'The credit of England', says Kersaint, 'rests on fictitious riches. The real riches of that people are scattered everywhere and essentially mobile. On her own soil the national wealth of England is to be found almost exclusively in her Bank, and the whole of that structure is supported by the prodigious activity of her maritime commerce.' With such an idea it was evidently easy to arrive at the thought of ruining the whole credit system of England by an attack on her trade. The same line of thought—the dependence of the credit system on foreign trade—is followed more completely in several papers of French authorship referred to by Kiesselbach and made the subject of an interesting investigation by Miss Cunningham. The writer was a Chevalier De Guer (or Deguer), who had gone to England as a Royalist émigré and had there made a special study of the British system of finance. He is of especial interest in this connexion, for the reason that Napoleon, in a letter of 1803, expresses great satisfaction with his work, and desires from him a more detailed account of the position of British finances. On the whole, he regarded that system as well worthy of imitation, even as regards the circulation of bank-notes, but at the same time he believed that it had certain weak points. He brought out his results, for the enlightenment of his countrymen, especially in a paper entitled Essai sur le credit commercial comme moyen de circulation, which was originally printed in Hamburg in 1801, but was afterwards reprinted in France, and also in other articles, one of which Napoleon caused to be inserted in his official organ, Le Moniteur, for 1803.
The discussions in question were connected especially with the questions of the gold reserve of the Bank of England and the British rates of exchange; and these connexions are of great interest here. As every one knows, Great Britain supported the struggle of the Continental powers against France by means of subsidies of varying magnitude. From the beginning of the revolutionary wars down to the Peace of Amiens in 1802, the sum total of these subsidies, according to the official statement, amounted to about £14,300,000, including one loan of £4,600,000 to the Roman Emperor in 1795. The total amount of extraordinary payments on the Continent, however, was much larger than that, exceeding £41,000,000 for the three years 1794-6 alone. The ability of Great Britain to continue these subsidies during the later phase of the Napoleonic wars, supplemented by her ability to maintain her own troops on the mainland, was manifestly one of the points in the economic position of Great Britain which, politically speaking, was bound to take a fore-most place in the eyes of the French statesmen. It was important, therefore, to see how strong the connexion of those subsidies was with the British system of credit.50
In this respect, also, Adam Smith's representation of the case is highly illuminative. In his famous criticism of the mercantile system as he conceived it, he is led to discuss the question—which is also well known in connexion with the recent war—as to the importance of gold reserves for carrying on war and consequently also as to their necessity for British payments on the Continent. He thus gets an opportunity to show that the expenses of war are defrayed 'not with gold and silver, but with consumable goods', and that these goods may be acquired by exporting from the belligerent country some part either of 'its accumulated gold and silver', or of 'the annual produce of its manufactures', or of 'its annual rude produce'. After a clear discussion of the first of these alternatives, he lays it down that 'the enormous expense of the late war (Seven Years War) must have been chiefly defrayed, not by the exportation of gold and silver, but by that of British commodities of some kind or other'; and he makes the weighty observation that, as a consequence of this, the exports of Great Britain had been unusually great during the war, without yielding any corresponding imports in return. But in so far as payment for the continental war was effected by means of precious metals, 'the money of the great mercantile republic,' those metals must also have been purchased with British export goods, since neither the accumulated bullion reserves nor the annual production of gold and silver was anything like sufficient to cover the huge sums in question. In general, therefore, he concludes that it is the exports of England that enable her to wage war on the Continent, and chiefly the exports of finer and more fully manufactured industrial articles, which are able to bear high transportation charges. 'A country whose industry produces a great annual surplus of such manufactures, which are usually exported to foreign countries, may carry on for many years a very expensive foreign war, without exporting any considerable quantity of gold and silver, or even having any such quantity to export.' Adam Smith also describes how this works out in practice. The government arranges with a merchant to remit the necessary supplies to the theatre of war, and the merchant, in order to establish a claim there, sends out goods either to that country or to another country where he can buy a draft on the former.51
To what extent this in itself absolutely conclusive statement—the capacity of which to throw light on the Continental System has not, to my knowledge, been observed—rightly leads to the conclusion that the exports of Great Britain were a necessary pre-condition for her capacity to carry on a war against France on the mainland, is a question which must be entirely reserved for later discussion.52 The only thing it is necessary to point out here is how very obvious such a consequence must have seemed. In De Guer's writings, as summarized by Miss Cunningham, that conclusion is reached without reference to Adam Smith, it is true, perhaps without his being known and, in any case, without any of his lucidity of thought. De Guer points out that, when war was waged in Westphalia or the Netherlands a hundred years earlier, as in Marlborough's time, England had no difficulty either in providing her own troops with what they required or in paying subsidies, for she could send goods there and thereby obtain balances to her credit on the spot. But as the Belgian ports had now been closed, and the theatre of war had also been moved to the Upper Rhine and the Danube, great credit difficulties had arisen in the paying of subsidies. Thus De Guer's way of putting things might inspire still greater hopes than that of Adam Smith as to the difficulty of maintaining the continental war if the exports of the subsidizing power were cut off from the Continent. Indeed, the French litterateur seems to have simplified the problem to the extent of having left out of account what is called 'triangular trade', which means that the exports to one country are used in order to buy drafts on, i.e., to pay debts to, another country. With such a conception the mere closing of the Continent might seem sufficient for the purpose, even if British trade as a whole were left undisturbed.
In his practical conclusions De Guer approaches the view that Adam Smith undertook to controvert. When England cannot pay subsidies by exporting goods abroad, the consequences, in De Guer's opinion, will be one or the other of the following: either she must export gold; and with the great circulation of paper currency within the country, as contrasted with the small increase of its supplies of metallic currency, this exposes all the note-issuing banks to the danger of collapse; or, on the other hand, she must neglect to export precious metals; and as she has not sufficiently large balances to her credit on the Continent to correspond with her payment of subsidies, the rates of exchange will then go against her to such an extent as to be ruinous to her trade. As usual, external phenomena, more or less correctly conceived, here affected the train of thought. There had been a heavy decline in the metallic reserves of the Bank of England (almost down to £1,000,000) which had led to its suspending payments in February 1797; and the attention excited by this event seems to have overshadowed the fact that the reserves only the next year rose again to £6,500,000, or even £7,000,000, and that during the following years, despite considerable fluctuations, they never again went down to the point where they were at the time of the suspension of payments. The British rates of exchange, especially on Hamburg, had fluctuated violently, and had been particularly 'unfavourable' to England, as has already been partially hinted,53 in the years 1794 and 1800-1801; and this was popularly connected with the great payments on the Continent, which undoubtedly coincided to some extent in time with these phenomena.54 De Guer's view was consequently very easily explained; to what extent it was correct, is a question which does not appertain to this stage of our inquiry.
What does concern us here, on the other hand, is the excellent basis for an attack on British exports created by such a theory. On the one hand, the conception of the rates of exchange and the supplies of precious metals, as effects of the balance of payment abroad, and, on the other hand, the conception of the general solvency of Great Britain as dependent on the bullion reserves of the banks, had carried people forward (or back) to a justification of the old mercantilist trade policy on a much stronger basis than before. For the commercial policy of the mercantile system also built on the doctrine of the balance of trade, on the danger of 'insufficient weight in the scales of trade'; but in the sixteenth and seventeenth centuries, unlike the Napoleonic period, there had been no system of note circulation with a metallic covering which might be assumed to be ruined by an unfavourable balance of payments.
EXPORTS OF GOLD
Such trains of thought were certainly not foreign to Napoleon, as will appear from his observations at a later period, to be treated in their proper place; but in the main it may be said that he was dominated by simpler economic notions. Judging from his own utterances, as well as from the evidence of his assistants, indeed, we cannot easily doubt that, thanks to his contempt for the ideologues, he was still in the pre-mercantilist or bullionist stage, which saw something unfortunate for a country in the exportation of the precious metals and good fortune in the importation of gold as such. Thus, for instance, in a highly characteristic letter of May 29, 1810, to Gaudin, his Minister of Finance, Napoleon writes how smuggling with England is to be arranged. 'My object', he says, 'is to favour the exportation of foodstuffs from France and the importation of foreign money.' In another letter, of April 3, 1808, to his brother Louis of Holland, he gives instructions as to how to export gin to England by means of smugglers, ending in the bullying apostrophe: 'They must pay with money, never with goods, never, do you understand?' In accordance with this idea licences were issued which authorized voyages to England against exports from there of gold and silver in specie and bullion, but nothing else; and in a report to the Emperor dated November 25, 1811, Gaudin gives as the object of the licensing system 'the extraction of metallic money from England, the exportation of French goods, and activity in our ports.' His colleague, Mollien, also mentions as an explanation of an extremely curious business with enormous advances from the French treasury to the financiers, whose business, on the contrary, would have been to advance the taxes (les faiseurs de service), that a thing of that kind could never have taken place unless those gentlemen had undertaken to obtain precious metals from the Spanish colonies, which were regarded as being of incalculable value.55 With such a conception, the war against British exports justified itself as soon as it caused Great Britain to export gold.
One might be inclined, beforehand, to doubt Napoleon's interest in these questions, but such a view would be an immense mistake. What was at once the strength and the weakness of Napoleon was that he wished himself to understand every detail of his government better than any of his assistants, and this is particularly true as regards finances. I do not know whether this is a characteristic trait of the French revolutionaries in general, but the same feature, as a matter of fact, is to be found in Bernadotte, concerning whom Trolle-Wachtmeister, an acute Swedish observer, tells us in his diary (1816) that the then Crown Prince did not at all dispute the possibility that Sweden had three hundred more efficient soldiers than he, but declared that with regard to high finance he would yield to nobody, as he had long made it a subject of special study. Possibly this was simply an imitation of Napoleon, with whose remarkable financial measures the later efforts of his old rival had many points in common. It is certain that Napoleon's fantastic but immensely laborious summaries, often made in the field and always by his own hand, of the tables given him by his ministers of finance, reveal an almost inconceivable attention to precisely these questions, although the results bear no proportion to his toil or his ingenuity. A study of his letters easily reveals this, especially when it is observed from where the writings date. Mollien's memoirs are a running commentary on the same tendency. He says that 'two months of discussions in council and private conferences, which were almost daily repeated at Paris or Saint-Cloud after the return of the Emperor from the banks of the Niemen (in 1807), had not exhausted that curiosity, that passion for details, which he felt especially in questions of finance. His imagination created at every moment new combinations of figures, which he took for the creation of new resources. His errors of this kind were the more difficult to confute because the figures in which he expressed them gave to the mistakes the appearance of mathematical verities.' Consequently, it is not at all unlikely that Napoleon ascribed to his notions on the credit system and the precious metals a decisive influence on his great policy against England.56
Probably, however, other matters also played a part. One of these was the rather self-evident idea which has already been incidentally mentioned, viz., that of causing dislocations in the economic life of England, especially in her industry. He caused one of his penmen, d'Hauterive, in a paper published in 1800, De l'état de la France à la fin de l'an VIII, to dwell on the thorough division of labour, on which the economic life of England was built, as a specially detrimental circumstance in every 'sudden change in the channels of trade', to use Ricardo's famous expression. As far as we can judge, it was especially unemployment, and consequent labour unrest, that Napoleon hoped to bring about in England through his policy of exclusion. At any rate, it is a fact that few matters in his own domestic policy occupied his thoughts to the extent that this did. The system of grants which he introduced for the benefit of industry in the crises of 1807 and 1810-11 he justified with his usual, and in this case very sensible, lack of sentimentality in a letter which he addressed on March 27, 1807, to his Minister of the Interior, Champagny, on the ground that he was anxious not to save certain business men from bankruptcy, but to prevent great numbers of workmen from being without work; and for the opposite reason no help was to be obtained for handicraftsmen and petty manufacturers on whom only a few workmen were dependent. Mollien, who entertained an orthodox laissez-faire dislike of this entire system of grants, also describes in detail how a large wool manufacturer, Richard Lenoir, who was in his opinion insolvent, succeeded in obtaining a loan of 1,500,000 francs owing to the fact that he was the owner of a large factory in one of the most populous suburbs of Paris, Faubourg St. Antoine. And Chaptal, whose views scarcely ever coincided with Mollien's, tells us, in full accordance with this, that the Emperor said to him: 'I fear these disturbances based on lack of bread: I should have less fear of a battle against 200,000 men'.
How Napoleon pictured to himself the purely external workings of the Continental System appears perhaps most distinctly from the already cited Survey of the Position of the Empire on August 24, 1807, which the Minister of the Interior laid before the Corps législatif. This purports to be a picture of the workings of the system; but as the latter had scarcely yet been put into execution at that time, it is mainly useful as giving evidence concerning its purpose.
England sees her merchandise repulsed from the whole of Europe, and her vessels laden with useless wealth wandering around the wide seas, where they claim to rule as sole masters, seeking in vain from the Sound to the Hellespont for a port to open and receive them.57
It now remains to be seen how this policy was put into execution, and what effects it involved.
[1.] Letters, instructions et mémoires de Colbert (Paris, 1861-73), vol. II, p. cclxvii; vol. VI, pp. 264-5, 269; vol. VII, p. 239; et al. As this side of mercantilist opinion does not appear to be at all generally understood, we may give a somewhat full quotation from Colbert's Dissertation sur la question: quelle des deux alliances, de France ou de Hollande, peut estre plus avantageuse à l' Angleterre (March, 1669), where the point of view is brought out with all the incisive logic of which Colbert was master: 'L'on peut avancer certainement que le commerce de toute l'Europe se fait avec le nombre de 20,000 vaisseaux de toute grandeur; et l'on demeurera facilement d'accord que ce nombre ne peut estre augmenté, d'autant que les peuples sont toujours égaux dans tous les Estats, et que la consommation est pareillement toujours égale.' Finding that one of England's chief considerations in deciding for or against an alliance must be the increase of her shipping, he goes on to say: 'Cette augmentation ne peut provenir que par la découverte de quelque nouveau commerce jusqu'à présent inconnu, ou par la diminution du nombre des vaisseaux de quelqu'une des autres nations. La découverte de quelque nouveau commerce est fort incertaine, et il n'est pas permis de raisonner sur une chose si casuelle, ou, pour mieux dire, si certaine qu'elle n'arrivera pas.... Il faut donc que ce soit par la diminution du nombre des vaisseaux de quelqu'une des autres nations.' Lettres, &c., vol. VI, pp. 264-5. Cf. Sombart, Der moderne Kapitalismus (2nd ed., Munich and Leipzig, 1917), vol. II, p. 918.
[2.]Schmoller, Umrisse und Untersuchungen zur Verfassungs., Verwaltungs- und Wirtschaftsgeschichte (Leipzig, 1898), p. 95.
[3.] This subject is obviously too comprehensive for incidental treatment in this connexion. What the writer has in mind is the signal reversal from the mediaeval eagerness to keep goods within reach to the opposite eagerness to dispose of goods which has been the predominant trait both of mercantilist and of popular present-day opinion.
[4.] 29 & 30 Char. II, c. 1, s. 70.
[5.] 1 James II, cc. 3 & 5.
[6.] 1 W. & M., c. 34, s. 1.
[7.] Statutes of the Realm, vol. v, pp. 862 et seq.; vol. VI, pp. 98 et seq., et al. Ashley, The Tory Origin of Free Trade Policy, in Surveys Historic and Economic (London, 1900), pp. 277 et seq.; Levasseur, Les traites de commerce entre la France et l'Angleterre, in Revue d'économie politique (1901), vol.XV, pp. 964 et seq.; Adam Smith, The Wealth of Nations (Cannan ed., London, 1904), vol. I, pp. 432, 437-8.
[8.] W. R. Scott, The Constitution and Finance of English, Scottish, and Irish Joint-Stock Companies (Cambridge, 1911), vol. III, pp. 80 et seq.
[9.] Adam Smith, op. cit., vol. I, pp. 458 et seq.
[10.] On this and what follows, cf. Rose, William Pitt and the National Revival (London, 1911), pp. 183 et seq., 322 et seq.; Salomon, William Pitt der jüngere (Leipzig and Berlin, 1906), vol.I, pt.II, pp.205 et seq.; Levasseur, Histoire des classes ouvrières et de l'industrie en France avant 1789 (Paris, 1901), vol. II, pp. 546 et seq.; Levasseur, Histoire du commerce de la France (Paris, 1911), vol. I, pp. 535 et seq., 542 et seq.; also, Histoire de France (Lavisse ed., Paris, 1910), vol. IX, pt. I, pp. 221 et seq. On the situation just after the Eden Treaty, cf. Schmidt, La crise industrielle de 1788 en France, in Revue Historique (Paris, 1908), vol. 97, pp. 78 et seq. The work of F. Dumas, Etude sur le traité de commerce de 1786 (Paris, 1904), was not accessible.
[11.] Chaptal, De l'industrie françoise (Paris, 1819), vol. I, p. xvi; Levasseur, Histoire des classes ouvrières et de l'industrie en France de 1789 à 1870 (Paris, 1903), vol. I, p. 405.
[12.] Schmidt, Les débuts de l'industrie cotonnière en France, 1760-1806, in Revue d'histoire économique et sociale (Paris, 1914), vol. VII, pp. 26 et seq.; Ballot, Les prêts aux manufactures, in Revue des études napoléoniennes (Paris, 1912), vol. II, p. 45.
[13.] Levasseur, Histoire des classes ouvrières, &c., de 1789 à 1870, vol. I, pp. 38 et seq.; Schmidt, Le Grand-duché de Berg, 1806-1813 (Paris, 1905), pp. 326-7.
[14.] Lois et actes du gouvernement (Paris, 1807), vol. VI, pp. 434-5; vol. VII, pp. 83, 409-10, 464-5, 492 et seq.;Bulletin des lois de la république française, 2d ser., bull. 86, no. 825; bull. 105, no. 1002; Le Moniteur, Sept. 23 and 24, 1793; Oct. 21, 1796; Levasseur, Histoire des classes ouvrières, &c., de 1789 à 1870, vol. I, pp. 38 et seq., 87 et seq., 260; Sorel, L'Europe et la révolution française (Paris, 1893), vol. III, pp. 476-7; vol. v, pp. 116, 124; Schmidt, Le Grand-duché de Berg, pp. 326 et seq.; Chapuisat, Le commerce et l'industrie à Genève pendant la domination française, 1798-1813 (Geneva and Paris, 1908), Annexe XIV; Rose, William Pitt and the Great War (London, 1911), pp. 103-4; Kiesselbach, Die Continentalsperre in ihrer ökonomisch-politischen Bedeutung (Stuttgart and Tübingen, 1850), pp. 55-6.
[15.] Söderqvist, Le blocus maritime (Stockholm, 1908), pp. 44-5.
[16.] Lydia Wahlström, Sverige och England under revolutionskrigens börjar (Stockholm, 1917), pp. 192-3; Parliamentary History, vol. XXXII, pp. 235-6.
[17.] See p. 94.
[18.] Manning, Commentaries on the Law of Nations (London, 1839), p. 117.
[19.] Stephen, War in Disguise: or, the Frauds of the Neutral Flags (Piggott ed., London, 1917), pp. 106-7.
[20.] Lecky, History of England in the Eighteenth Century (original library edition, London, 1882), vol. IV, p. 157.
[21.] Holm, Danmark-Norges udenrigske Historie fra 1791 til 1807 (Copenhagen, 1875), vol. I, p. 231; Stephen, op. cit., p. 170.
[22.] Stephen, op. cit., pp. 60 et seq., 90, 195, et al.; Emory Johnson and others, History of the Domestic and Foreign Commerce of the United States (Washington, 1915), vol. II, p. 23; Parliamentary History, vol. XXXV, p. 916; Hansard's Parliamentary Debates, vol. XXIII, pp. 8, 42-3.
[23.] Brodnitz, Englische Wirtschaftsgeschichte (Jena, 1918), vol. I, p. 140.
[24.] Hansard, vol. IX, app., col. XV; Levasseur, Histoire des classes ouvrières, &c., avant 1789, vol. II, p. 554 note; Johnson and others, op. cit., vol. II, p. 20.
[25.] Stephen in the House of Commons, Mar. 3, 1812, Hansard, vol. XXI, p. 1136.
[26.] Stephen, War in Disguise, p. 168.
[27.] Stephen, War in Disguise, pp. 39, 70 et seq., 169, et al.; Rose, vice president of the Board of Trade in the House of Commons, March 3, 1812, Hansard, vol. XXI, p. 1122; Mahan, Influence of Sea Power upon the French Revolution and Empire, 1793-1812 (London, 1893), vol. II, pp. 252 note, 309; The Laws of England (Halsbury ed., London, 1907), s.v. Aliens, vol. I, pp. 311-12; Wahlström, op. cit., pp. 62-3. In this connexion it may not be irrelevant to refer as a parallel to a well-known passage in the Pickwick Papers (ch. 40): 'What, am I to understand that these men earn a livelihood by waiting about here to perjure themselves before the judges of the land, at the rate of half a crown a crime!' exclaimed Mr. Pickwick, quite aghast at the disclosure. 'Why, I don't know exactly about perjury, my dear sir,' replied the little gentleman. 'Harsh word, my dear sir, very harsh word indeed! It's a legal fiction, my dear sir, nothing more.'
[28.] See p. 33.
[29.] Martens, Recueil des principaux traités (2d ed., Göttingen, 1826), vol. v, pp. 596-604; Annual Register, 1793, State Papers, pp. 176 et seq.; Stephen, op. cit., p. 175 note, 18 et seq., 33; Holm, op. cit., vol. I, pp. 106-15, 171 et seq.; Mahan, op. cit., vol. II. pp. 233 et seq.; also, Sea Power in its Relations to the War of 1812 (London, 1905), vol. I, pp. 27, 89-90, 93; Wahlström, op. cit., pp. 10 et seq., 62-3, 99, 126; Bassett, The Federalist System, 1789-1801, in The American Nation: A History (New York and London, 1906), vol. II, pp. 122-3, 129; Klinckowström, Le Comte de Fersen et la cour de France (Stockholm, 1878), vol. II, p. 419; Lars von Engeström, Minnen och anteckningar (Stockholm, 1876), vol. I, pp. 235 et seq.
[30.] Büsch, Sämmtliche Schriften über die Handlung (Hamburg, 1825), vol. v, pp. 278-9.
[31.] Correspondance de Napoléon Ier (Paris, 1858-1869), no. 18,491 (Feb. 8, 1812).
[32.] Lois et actes, &c., vol. VII, pp. 52-3; Bulletin des lois, &c., 2d ser., bull. 178, no. 1,678; bull. 235, no. 2,118; Martens, op. cit., 2d ed., vol. v, pp. 388-9, 398-9; vol. VI, pp. 743-4; Büsch, op. cit., chs. VIII-IX; Holm, op. cit., vol. I, pp. 69, 175-6, 195, 222 et seq., 232-50, 258, 266-7, 307, 313; Mahan, Influence of Sea Power, &c., vol. II, pp. 219-20, 243 et seq., 255 et seq.; Bassett, op. cit., pp. 220-21. For the whole of this part of the subject, cf. also Söderqvist, op. cit., pp. 18-49; Report of the Fourth Special Committee of the Swedish Second Chamber for 1902, no. 8, pp. 54-61; The Armed Neutralities of 1780 and 1800, edited by James Brown Scott (Carnegie Endowment for International Peace, Division of International Law. New York, 1918); Hugo Larsson, Sveriges deltagande i den väpnade neutraliteten, 1800-1801 (Lund, 1888); Clason, Gustaf IV Adolf och den europeiska krisen under Napoleon (Stockholm, 1913).
[33.] See p. 32.
[34.] Schmidt, Le Grand-duché de Berg, p. 418.
[35.] Le Moniteur, Jan. 3, 1793; Sorel, op. cit., vol. m, pp. 244-5.
[36.] Commentaires de Napoléon Ier (Paris, 1867), vol. III, p. 413. As the essay is not included in the Correspondance, the authorship of the Emperor does not appear to be above doubt.
[37.] See pp. 31-32.
[38.] Zeyss, Die Entstehung der Handelskammern und die Industrie am Niederrhein während der französischen Herrschaft (Leipzig, 1907), p. 94; Schmidt, Le Grandduché de Berg, pp. 339 et seq.; Serviéres, L'Allemagne française sous Napoléon Ier (Paris, 1904), pp. 128-9; Wohlwill, Neuere Geschichte der Freien und Hansestadt Hamburg insbesondere von 1789 bis 1815, in Allgemeine Staaten-Geschichte (Gotha, 1914), Abt. III, Werk x, pp. 181 et seq., 197, 202 note 2; also, Frankreich und Norddeutschland von 1795 bis 1800, in Historische Zeitschrift (1883), pp. 424-5.
[39.] Sorel, op. cit., vol. IV (1892), pp. 176, 183, 213, 266 et seq., 359, 387 et seq., 392, 464; vol. V (1903), p. 102.
[40.] Le Moniteur, Nov. 4, 1796; Mahan, Influence of Sea Power, &c., vol. II, pp. 248 et seq. Dupont de Nemours combated the proposal, as might have been expected of an orthodox economist; but when the President announced that the motion of Lecouteulx had been carried another member exclaimed: 'Nous sommes sauvés!' Le Moniteur, Nov. 6 (Brumaire 16).
[41.] Preussen und Frankreich von 1795 bis 1807, in Publicationen aus den K. Preussischen Staatsarchiven, VIII (Bailleu ed., Leipzig, 1881), vol. I, p. 113; Mahan, Influence of Sea Power, &c., vol. II, pp. 247-8. Admiral Mahan, however, appears to believe in the truth of this altogether unfounded rumour, for the facts of which cf. Wohlwill, Neuere Geschichte, &c., pp. 161, 188-9.
[42.] See infra, p. 74.
[43.] Le Moniteur, Jan. 15, 1793.
[44.] Chaptal, Mes souvenirs sur Napoléon (Paris, 1893, but written shortly after 1815), pp. 274-9; Lettres inédites de Napoléon Ier (Lecestre ed., Paris, 1897), no. 134.
[45.] Macaulay, History of England (1st ed., London, 1855), vol. IV, ch. XIX, pp. 327-9; Burke, Observations on a late publication intituled 'The Present State of the Nation' (1769); Adam Smith, op. cit., vol. II, pp. 396, 407-8, 414-15; The National Debt, 1786-1890 (Blue Book, C. 9010, London, 1891), p. 72; Kiesselbach, op. cit., p. 70 note; Miss Cunningham, British Credit in the Last Napoleonic War (Cambridge, 1910), pp. 17-18, 27 et seq.
[46.] Correspondance: Communications as regards Finances and the Banque de France; e.g., on the former, no. 21,020 (Dec. 19, 1813); on the latter, no. 6,040 (Apr. 15, 1802), no. 14,305 (Sept. 8, 1808), nos. 16,438, 16,448, 16,471 (May 5, 9, 15, 1810); Mollien, Mémoires d'un ministre du trésor public, 1780-1815 (Gomel ed., Paris, 1898), vol. II, pp. 411-33, 465 et seq., et al. Less weighty in this connexion are the utterances of the great speculator Ouvrard, Mémoires sur sa vie et ses diverses opérations financières (Paris, 1827), vol. I, pp. 73, 135, 195, 201; G. Weill, Le financier Ouvrard, in Revue Historique (Paris, 1918), vol. 127, p. 47; Sorel, op. cit.) vol. VI, pp. 212, 242.
[47.] Mollien, op. cit., vol. I, pp. 185 et seq., &c.
[48.] See p. 62.
[49.] Correspondance, nos. 9,929 (Mar. 5, 1806), 14,413 (Oct. 25, 1808), 21,020 (Dec. 19, 1813), &c.
[50.] Rose, Napoleon and British Commerce (1893), reprinted in Napoleonic Studies (London, 1904), p. 167; also in his chapter on 'The Continental System' in The Cambridge Modern History (Cambridge, 1906), vol. IX, p. 363; Correspondance, no. 6,611; Kiesselbach, op. cit., ch. III; Miss Cunningham, op. cit., ch. IV; Porter, The Progress of the Nation (new ed., London, 1851); sec. IV, ch. IV, p. 507 (on the basis of a return to the British Parliament in 1815); Tooke, A History of Prices from 1793 to 1837 (London, 1838), vol. I, pp. 208-9; Hawtrey, The Bank Restriction of 1797 in the Economic Journal (1918), vol. XVIII, pp. 52 et seq., rept. in Currency and Credit (London, 1919). ch. XVI. The figures of Mr. Hawtrey (p. 56) agree with those of Tooke, if they are taken to include the loan to the Emperor, though they are said to exclude it. The total of Tooke (£42,174,556) is wrong by one million, according to his own figures. I have followed him with the necessary correction, not having had access to the Parliamentary Paper from which he secured his data.
[51.] Adam Smith, op. cit., vol. I, pp. 407-11.
[52.] See pt. IV, ch. IV.
[53.] See p. 42.
[54.] Tooke, op. cit., vol. I, pp. 197-207, 239-52; vol. II, p. 384.
[55.] Correspondance, nos. 16,508, 13,718; Servières, op. cit., p. 136, note 3, pp. 138-9; Mollien, op. cit., vol. 1, p. 493. The letter to King Louis is printed in the Correspondance from the Mémoires de Ste-Hélène, and is dated from a place where the Emperor arrived only a fortnight later; but there does not appear to be any reason for doubting its authenticity.
[56.] Trolle-Wachtmeister, Anteckningar och minnen (Tegnér ed., Stockholm, 1889), vol. II, p. 74; Mollien, op. cit., vol. II, p. 155, et al.
[57.] Correspondance, no. 12,187; Ballot, loc. cit., vol. II, pp. 48-9; Mollien, op. cit., vol. III, pp. 19-25; Chaptal, Mes souvenirs, &c., p. 285; Correspondance, no. 13,063.